I'm hardly an expert on fermented chilli sauces, but I can briefly explain the fermentation process and then link to the Youtube clips that got me into DIY fermented hot sauces.
So, fermentation is a very old way of preserving vegetables by letting a special type of bacteria, lactobacillus, consume the sugars in the vegetables. In the process, lactic acid is produced and as a result the pH drops into a region where pretty much no microorganisms can survive (typically below pH 4).
To successfully ferment say chilli, you need lactobacillus to process the chillies, and a way of preventing other bacteria and mold to develop. Vegetables (that has not been disinfected) has lots of lactobacillus and a bunch of other microorganisms on its surface. Lactobacillus eat sugar, and sugar is only present in decent amounts in chillies that have color (not green). So do not try to ferment green chillies. It will not work.
To prevent the "bad bacteria" from multiplying, you add between 2 and 3% salt. Lactobacillus will thrive in 2-3% saline solution, where as all the other bacteria will not. When the fermentation starts the pH will drop rapidly killing all other bugs present.
So, what I do is:
1. I first rinse the chillies briefly under non-chlorinated (or any other disinfectants) water (where I live tap water just pure water so I can just use that).
2. I prepare the fermenting jars. I disinfect them by either boiling the jar, lid, and all other parts like the air lock, or I use StarSan to make sure there's as little contaminants as possible. I also make sure the chopping board is sanitized, just to be on the safe side, but in all honesty, I don't actually think it makes any difference since we're going to immerse everything in a salt brine anyways...
3. I cut the chillies in halves or maybe even smaller pieces -the important thing is to open them up so that the brine can fill up the void inside, otherwise they will float up to the top which we do not want.
4. So, to make sure the chillies are all submerged in the brine, I also prepare a "sacrificial vegetable" to use as a barrier pushing the chillies below the brine level. Some use weights of different kinds like stones but I didn't have any appropriate at hand when I did my first fermentation so I used a piece of onion. The idea here is that the onion will keep the chillies safe below the brine level while the onion (or whatever vegetable you use) will be at risk of having some unwanted microbes grow on it above the brine level.
5. Pack the chillies into the jar as tightly as you can, put the weight or the "barrier" in and fill it up with the salt brine. The fermentation process will produce CO2 so you need a way of venting that from the jar. I use the same air locks I use when making my craft beer, but you could just use a plastic bag over the jar held in place with a rubber band or two.
6. place the fermentation jar in a slightly cool place. Idealy say 63-65F.
7. Ferment for at least 2 weeks, I like to ferment for 4 weeks or sometimes more, because just as with beer, the fermentation temperature and fermentation length affects the taste and aroma. Higher temperatures and shorter fermentation lengths tend to produce more "funky" aroma and taste IMHO. Cooler and longer fermentation produces more subtle flavours and aromas.
8. When fermentation is complete, poor out the brine, put the chillies in a mixer and blend it smooth. Add other dry spices to your liking. For food such as vegetables to be shelf stable, the pH needs to be less than 4.6 (if I recall correctly) so even if perhaps not needed (my chilli fermentations have all come out around pH 4) vinegar can be added to make sure the sauce is shelf stable at room temperature.
9 If you like smooth sauce, strain it through a sieve and bottle it. Otherwise, just bottle it.
Below are some pictures of this year's hot sauce project (in addition to the chillies, I added a few garlic cloves to each of the jars, so the final sauces are made up of fermented chille and garlic, and some additional vinegar):
The random Youtube-clip that got me going on doing my own fermented hot sauces was the ChilliChump channel I just stumbled upon a few years ago, searching for completely unrelated videos. And I got hooked: