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They have only distilled the diffusion model used as a replacement for the VAE decoder, not the main diffusion model.

So the latent to pixel space conversion is made with another diffusion model?

This is kind of refiner used in SDXL?

>So the latent to pixel space conversion is made with another diffusion model?

Yup

>This is kind of refiner used in SDXL?

The refiner only works on the latent.