It might not help because it's in svelte and it doesn't look like you're using lemmy-js-client, but this is an example of how I do it in Alexandrite using lemmy-js-client. The onPaste function handles the paste event on the markdown editor textarea when someone pastes with an image in their clipboard, and the onFileInputChange is the change event for an <input type="file" /> element so when someone selects a file it uploads and the input's label can be styled like a button. Here is the client's fetch function which handles the authorization header and whatnot. You can upload client-side without a proxy server for any instance running a newer version of Lemmy than like.... 0.19.0? I didn't want to be responsible for proxying image uploads so I waited to add image uploading in Alexandrite until I could do the uploads directly client side.