Click the image button in the editor toolbar to open the image dialog. From there you can upload a file from your computer or paste an image URL, add descriptive alt text for accessibility, and optionally set a display size before inserting.
Uploaded images are stored per-project, so they stay scoped to the project they were added to rather than shared across your account.
For your project's own icon (shown in the sidebar, dashboard card, and search results), go to Project Settings → Appearance and upload it there instead of inline in a section.