It's just markdown files. I use obsidian with vimwiki for quick notes in hierarchical markdow file structure, using git for sync.

Got curious as well (I use Roam which exports in Markdown and JSON).

The files locally are in Markdown but that may be a consequence of importing it from Roam. Obsidian doesn't seem to have a native exporter as far as I can tell so you have to use a community plugin exporter.

As you have hinted at, yes, the exports from Roam and Obsidian generally lose your graph so you only get the plain-text.