Under the "edit avatar" settings there are options to select a generic avatar, but there is also an option of "do not use an avatar", to the right of which there is the following message:

"Note: if you have a custom avatar selecting this option will delete it."

This implies that we have the option of creating/displaying custom avatars, which we do not. Either that or my Lodestode setup is broken because there is no link under My Profile or Settings that allows me to upload/set a custom avatar.