This sets each image source to use a tiny (typically less that 1k) version of the image. With some CSS, we size the image to fit and add some blurring to smooth it all down nicely.
Removing the CSS class which applies the blur once our new image source is loaded completes the effect.
Need some reference code to get you going? You can clone the code for this site to use as an example.
Once cloned, you can find examples and documentation on how to configure Netlify Large Media, in the docs.