sqm-scripts uses the Linux qdisc mechanism to configure traffic shaping and scheduling. Either by a combination of the HTB qdisc (for shaping) and fq_codel (for packet scheduling), or using the CAKE integrated scheduler to do both at once.
Because qdiscs only see traffic as it is leaving an interface, for ingress shaping sqm-scripts sets up an IFB device. Incoming packets are redirected to this device where a regular qdisc can handle them. The IFB device is named for the egress interface it is paired with, so the IFB for 'eth0' will be called 'ifb4eth0'.
This is all illustrated on the following diagram:
qdisc diagram Diagram contributed by Matt Taggart (@taggart).