# User Referral System

The referral system is designed to reward users who bring new participants into the ecosystem and help grow agent trading activity.

**Each time a referred user trades, the referrer earns.** Rewards are **paid out daily in $VIRTUAL** and are based entirely on onchain volume.\
\
**This system is built to:**\
• Reward users who contribute to protocol growth through direct participation\
• Return value to those who help drive aligned trading behavior\
• Maintain fairness and verifiability through transparent onchain incentives

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**How does it work?**

When a referred user trades in a taxable Agent/$VIRTUAL pool, a 1% trading tax is applied. A portion of that tax is redistributed as referral rewards across a two-layer structure:

| Category           | Share of 1% Trading Tax | Payout   |
| ------------------ | ----------------------- | -------- |
| Developer          | 70%                     | -        |
| Referrer (Layer 1) | 20%                     | $VIRTUAL |
| Referrer (Layer 2) | 5%                      | $VIRTUAL |
| Ecosystem Pool     | 5%                      | -        |

* Layer 1: Your direct referral. When this user trades, you receive 20% of the trading tax from their activity.
* Layer 2: The referral of your referral. When *they* trade, you also receive 5% of the trading tax from their activity.

Anything beyond Layer 2 is not eligible for referral rewards.

**All rewards are paid in $VIRTUAL, distributed daily based on trading activity.**

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**How do I refer a user?**

Each user receives a unique referral code that can be shared with others.

Once a new user enters your code and begins trading, you become eligible for referral rewards. Rewards only apply after the code is linked. They do not apply retrospectively.

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**What types of trades generate referral rewards?**

Referral rewards apply only to buy and sell trades in taxable Agent/$VIRTUAL pools.

**• Rewards are calculated from the trading fees generated by eligible trading volume**\
• Trades involving tax-exempt tokens (such as $LUNA or migrated tokens) are excluded\
• Trades involving Solana agents are currently exempted and do not qualify.\
• Staking agent tokens, staking $VIRTUAL, and yapping do not qualify.

Only trades in taxable agent/$VIRTUAL pairs are eligible for the 1% referral trading tax and reward distribution.

{% hint style="danger" %} <mark style="color:red;">Trades involving $VIRTUAL in non-taxable liquidity pools (e.g., $VIRTUAL/USDT pairs on CEXs or DEXs) do not qualify for referral rewards. Only trades in taxable agent/$VIRTUAL pairs are eligible for the 1% trading tax and reward distribution.</mark>
{% endhint %}

**TLDR:**\
• Share your referral code\
• Earn 20% of the trading tax from your referrals (Layer 1), and 5% from their referrals (Layer 2)\
• Rewards are paid in $VIRTUAL, distributed daily

<sub>*Disclaimer: By participating, you consent to the*</sub> [<sub>*disclaimer*</sub>](https://app.virtuals.io/disclaimer)<sub>*.*</sub>