A referral program rewards existing participants for bringing new participants into a campaign or platform, usually as a percentage of what the referred users earn or spend. Referral mechanics are widespread in Web3 growth because they turn a campaign’s own participants into its distribution channel.
Paying a percentage of downstream activity rather than a flat bounty per signup is what keeps the mechanic honest. A flat bounty rewards volume of signups, which invites empty accounts. A percentage only pays when the referred participant does something, so the referrer is motivated to find people who will actually take part.
The failure mode is self-referral at scale, where one operator invites accounts they control. Platforms answer this with activation gates and caps, which is the same defensive problem as a Sybil attack approached from the referral side.
