It uses `kitty` terminal's built in support for images. [0][1]

[0] https://sw.kovidgoyal.net/kitty/graphics-protocol.html [1] https://github.com/o2sh/onefetch/blob/master/src/image_backe...

Note: iTerm2 also has its own image display protocol and for something more generic there is Sixel or w3mimgdisplay (from w3m).