If in nuxt.config.js you defined:
axios: { baseURL:"localhost:4040/api/"}
All you need to do for the image is to point to it as follows:
:src="`${$axios.defaults.baseURL}upload/1.png`"
You can access axios config like this to get your api base URL:
this.$axios.defaults.baseURL
In case if someone is wondering how to make an axios baseURL domain-independent:
Here is how simply it can be achieved:
axios: { baseURL: '/'}
It will work on localhost:3000/api as well as on any-domain.com/api
localhost:3000/api
any-domain.com/api