Generally, PNGs are ideal for graphics-based images, such as logos, watermarks, icons, and other pieces of design. PNGs are a versatile image format because they support lossless compression as well as transparency, two things the other popular image format - JPG - does not support. PNGs are raster-based image files, which means they are made up of a grid of pixels, with each pixel filled with one color to create a larger image.