Set icon or logo for extension in vscode

You can set the icon in the extension’s package.json file, which is also called “extension manifest”.

The field in which you set the path to an icon is called "icon". The icon file itself has to be 128×128 pixels. As noted by Philipp Kief in the comments, you should use a PNG file, not an SVG.

Example:

{
    "name": "extension-name",
    "displayName": "Extension Name",
    "description": "...",
    "icon": "images/spellIcon.png",
    "version": "0.0.1",
      ...

More on VS Code’s official page.