Referral and Engagement Mechanisms

How does the referral system work for bringing new users to the network?

The referral system is designed to incentivize block producers and existing users to bring new users onto the Toto Chain by offering POTENTIAL rewards. Here’s how it works:

• Block producers and users can refer new users by transferring a portion of their POTENTIAL to the new account.

• The referred user gets a share of the referrer’s POTENTIAL automatically.

• Referrals are tracked in a tree structure, meaning users referred by someone become part of their referral network.

• Block producers set a "share parameter" that determines how much of their POTENTIAL earnings are distributed among their referral network.

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What is the “share parameter,” and how does it affect my rewards?

The share parameter is a percentage set by a block producer that determines how much of their POTENTIAL earnings are distributed to their referred users.

• The default share parameter is 80%, meaning 80% of the POTENTIAL a block producer earns is distributed among their referral network.

• If a referred user later becomes a block producer themselves, they stop receiving referral POTENTIAL and instead earn directly from their own block production.

• This parameter creates an incentive for block producers to build and maintain a strong referral network​.

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How can a block producer change the "share parameter"?

• A block producer can modify their share parameter at any time to adjust how much POTENTIAL they distribute to referrals.

• The new share percentage applies to all new users referred moving forward but does not retroactively affect users already referred.

• Changing the share parameter affects how attractive a block producer’s referral offer is, so setting it too low may discourage users from joining through their link.

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Are there limitations on the number of users I can refer daily?

Yes. The system limits referrals based on POTENTIAL balance and decay mechanics:

• A user can refer up to 28 new users per day.

• The amount of POTENTIAL transferred per referral is based on 1/28th of the referrer’s current balance.

• This limitation prevents abuse while ensuring steady and sustainable onboarding of new users​.

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How does the system ensure the authenticity of new users joining through referrals?

The Toto Chain is implementing several mechanisms to ensure the authenticity of referred users:

1. DID Attestation Requirement:

   • New users need a minimum number of attestations from existing users before they start receiving referral rewards.

   • For example, a new user may need 5 attestations before they start earning POTENTIAL.

2. KYC-Based Identity System (Upcoming Feature):

   • A KYC system is being developed to verify referrals and prevent fake accounts.

   • This will ensure real individuals are joining the network​.

3. Referral Tree Mapping:

   • If a block producer is disabled or removed, their referred users are automatically reassigned to their referrer’s referrer.

   • This ensures continuity in the network and prevents abandoned accounts from becoming bottlenecks.