probably going to be different across servers (haven't confirmed) but many are using pictrs as part of Lemmy for image management. you can configure the details on how and at what quality they are stored. git is here: https://git.asonix.dog/asonix/pict-rs
I've actually found it to br far better than reddit, mostly because 99% of reddit posts these days are bot reposts of an jmage that's been cycled a LOT