should be the default/preinstalled with firefox

Exactly what I needed while debugging a web transparent image generator, thanks!

All the time I wasted thinking I was doing something wrong when exporting my images. And all I needed was this. Perfect solution!

How can I get this extension to work?? I never see an option to use it when I click (or right click) an image..

You don't need an extension for this! Always check if you can do simple changes with a CSS script, and you can for new tab image transparency: https://github.com/MrOtherGuy/firefox-csshacks/blob/master/content/standalone_image_page_mods.css

In your search bar, type in "about:support", find and open "Profile directory", create a "chrome" folder, create userContent.css there and add this to it:

@-moz-document regexp("(.*\.(apng|png|jpg|jpeg|gif|webp|avif|ico|bmp|APNG|PNG|JPG|JPEG|GIF|WEBP|AVIF|ICO|BMP)([\?#].*)*$)|(^data:image/.*)"){

@media not print {
img.transparent:only-child{
background: none !important;
}
}
}

Been using this ever since Firefox stopped showing transparency in PNGs.

This does exactly what it says and doesn't introduce any problems.

Despite this, I've personally uninstalled it as I also had the Stylus extension already, so have instead opted to remove the styles myself and reduce one extension.
If you happen to use Stylus already, you can use this to achieve the same result:

@media not print { head + body > img:first-child.transparent[src][alt] { background: none; } }

Works perfectly. Crucial if you plan on doing literally any work with images.

A godsend! It does exactly what you need it to do and nothing more! I wish this was in Firefox as a default!