> For the complete documentation index, see [llms.txt](https://docs.lazai.network/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.lazai.network/lazainetwork/user-docs/how-does-it-work.md).

# How Does it Work?

<figure><img src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeXt1C3nJbeUI9emCTWyz9MpkWL8SNCu5kXlwWKUBKg58hF3tLaZb_AkjXQ5ddnmRTX-v3hHyeRqU20Uile1hdgXv6QbUbC_o3GgxLB_mx8OHLDMh00arCGZi0sLJLs8tan5UfpZg?key=S_AVxe4Pa4t7GMdXHRa1L20C" alt=""><figcaption></figcaption></figure>

### Scenario Overview

Alice is a virtual character creator. She wants to turn her AI-powered persona, "Cyber Diva" into a monetizable experience. This character has a unique voice and dialogue style. By using **LazAI**, she can offer interactive sessions with "Cyber Diva" through a decentralized system, with payment in **DAT tokens** and complete transparency over how the model was trained and who contributed.

#### Key Participants

* **Creator (Alice):** Prepares and submits datasets to model the character’s voice, tone, and behavior.
* **Validator Nodes (iDAO):** Validate data using ZK proofs to ensure integrity.
* **Inference Providers:** Run GPU-enabled nodes that handle AI requests.
* **Consumers (Users):** Interact with the character by paying in AI gas tokens.
* **Governance DAO:** Adjusts parameters like reward distribution dynamically.

#### Workflow Breakdown

1. **Character Modeling Phase**
   1. Alice preprocesses text/audio of the character.
   2. She uses the **Alith Agent Framework** to submit her dataset in **POV** format.
   3. Submission includes:
      1. Text & vocal tensors
      2. Public dialogue prompts (stored on-chain)
      3. ZK proofs for data integrity
2. **Model Minting Phase**
   1. LazAI’s AI Execution Layer (ExEx) detects the submission.
   2. Using GPU co-processors, it fine-tunes the base model with low-rank adaptation (LoRA).
3. **DAT Anchoring Phase**
   1. A **Semi-Fungible Token (SFT)** is minted, containing:

      1. Metadata of the base model
      2. Access controls
      3. Inference endpoints

      This token acts as a verified, tradable proof of data ownership and model provenance.
4. **Interactive Inference Phase**
   1. A user sends a request to talk with "Cyber Diva".
   2. The model runs on a GPU-powered node and returns the interaction result.
5. **Settlement Phase**
   1. Rewards are auto-distributed as follows:
      1. 70% to Alice
      2. 20% to inference node operators
      3. 10% to the governance pool

#### Why This Matters

This use case shows how LazAI supports real-world applications that rely on:

* Trusted data (via DAT)
* Modular model deployment (via Alith & ExEx)
* Automated, decentralized revenue sharing
* Privacy-preserving inference & transparent governance


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