As we explained before, the metadata + image of the position NFT is fully on-chain. There is a contract that, given a position id, returns a base64 string with the ERC721 metadata JSON. This JSON also contains a SVG (also as a base64 string) that displays the information about the position, such as:
Average swap price
We call the contract responsible for this work "NFT Descriptor". Since all of this work is performed on-chain, there is no need for external servers or IPFS.
This on-chain SVG approach approach is based on Uniswap's v3 NFT positions.