Starting quest: Alatus Chapter I
The first quest, “Alatus Chapter I,” is unlocked as long as you’ve reached Adventure Rank 23 and once you’ve completed “Of the Land Amidst Monoliths” (part of the Rite of Descension quest in Liyue). Assuming you’re already good to go, the quest pops up once you launch Genshin Impact.
Visit the outskirts of Wangshu Inn to find some hilichurls surrounded by an evil aura. You’ll also meet a dishonest vagabond named Starsnatcher.
After a quick encounter, you’ll head to Liyue Harbor’s bookstore.
Go find the book about Yakshas that’s near the book vendor. You’ll be treated to a cinematic explaining the origins of Xiao and the Yaksha (aka. the Demon-hunting Power Rangers).
You’ll then have another conversation with Starsnatcher, followed by a talk with Xiao. The next part will let you control Xiao only as he attempts to complete a domain.
Note: For this part, you’ll be treated to a showcase of Xiao’s abilities. Xiao’s ult, “Bane of All Evil,” will remain active while you’re in the domain. This means he’ll lose a bit of health, though you can regen your HP whenever you kill your enemies.
When you’re done, head to the quest marker to meet a man by the name of Pervases. He’ll ask you to pick up Seven-Star Lamps in the area.
After this, you’ll go to a shrine to meet up with Xiao again. You’ll light up the shrine by following the instructions (don’t worry, these are all straightforward).
When all is said and done, go back to Wangshu Inn. Talk to Verr Goldet, then talk to Xiao to complete the quest.
You’ll receive EXP books, talent books, mora, ores, and primogems.
Starting quest: Lantern Rite Part I
After completing “Alatus Chapter I,” Verr Goldet tells you to celebrate the Lantern Rite’s festivities by going to Liyue Harbor. The tasks here are fairly straightforward, too. All you need to do is talk to all the marked NPCs since they’ll inform you about what goes on in the festival.
One of the more important NPCs here is Jingming since he’ll tell you how to make Xiao Lanterns.
In the end, you should be able to unlock some of the features that are part of this event.