You have proven your mettle to Seto, but he asks you to complete a task while he comes to a decision.
This quest is available if you have completed the quest A Resounding Roar.
Starting the Quest
Talk to Seto in Il Mheg to begin the quest.
Search for Seto's Medallion
Go southwest to where the orange arrow is pointing in the minimap. In the orange circle on the map, dive underwater by pressing Ctrl+Spacebar on keyboard or by pressing B on Gamepad. Go to the center of the orange circle and swim into the ruined church. While inside the church, go to the northwest side of the orange circle and check on the sparkling Glittering Object.
Deliver the Medallion
Teleport to Wolekdorf or go northeast to where the orange arrow is pointing in the minimap. At the quest icon, talk to Seto to hand over the Golden Medallion and complete the quest. There will be a cutscene. This one is important, so it is recommended to watch it either now or via the Unending Journey in an inn room.
Next Main Scenario Quest
After you complete the quest, talk to Seto to accept the next quest: Acht-la Ormh Inn.