xlm.sh turns a Soroban Domain into a web address. Point your name at a site on IPFS and it is live at your-name.xlm.sh, with nothing for visitors to install.
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blend.xlm.sh is looked up as blend.xlm in the Soroban Domains registry, which says which Stellar account the name points to.
That account's data entry app.xlm_sh.ipfs holds the site's IPFS CID, or an IPNS name that can be updated without a transaction.
xlm.sh fetches the content from its own IPFS nodes and serves it over HTTPS, on an origin of its own.