Man-made space debris orbit around the Earth at many altitudes in different orbits and many launches add further debris to already congested orbits. The ESA GSTP-funded Optical In-Situ Monitor project started in 2016 and aims to analyze the End-to-End processing pipeline from image acquisition to the extracted positions of space debris. A camera will take images and an on-board data processor will filter and compress the images obtained, which in case of a future Flight Model of the instrument-shall be downlinked to the ground station. For the image filtering and compression, several algorithms are considered and also two different kinds of processors are considered. The difficulty of the images is to differentiate between stars in the background (which have to be filtered out) and the debris. We present a short overview of the project, the current status and the algorithm trade-off.