# Referral Pool

{% hint style="info" %}
Two kind of referrals have been developed. 

1/ The classic one where a referrer and a referee are rewarded when the referee registers and creates a wallet in Frak. 

2/A far more sophisticated and rewarding one with which the referrer shares a given content to his/her referees and will be rewarded for every earnings made by the creator, at any referral level.
{% endhint %}

### Reward for a new Wallet Creation

For every wallet created by a referee, the referrer and the referee’s wallets are credited with **FRK50** each. The users can find in the app a personal code (the `user_id`) that they can share very simply with their friends. 

Every time a new user signs in, fills in the referrer’s personal code and creates a wallet in FRK, both wallets received the **FRK50**.

### n-Level Reward by sharing a Content

{% hint style="info" %}
When users share a content to their contacts, they create some value for the content. Therefore, Frak offers them to capture a share of this value because they act as a distributor/reseller.
{% endhint %}

Let’s take a given content $$P\_i$$ and a user $$A\_1$$ that shares the content with the users $$A\_2$$, $$B\_2$$ and $$C\_2$$. The user $$C\_2$$ shares the content with the users $$A\_3$$, $$B\_3$$ and $$C\_3$$.

As a big picture, when the user  $$C\_3$$ interact with the content$$P\_i$$, the user $$C\_2$$ will earn 6% of the earnings of the Creator and the user $$A\_1$$ will earn 80% of what $$C\_2$$ earned : 4.8% of the earnings of the Creator.

If the user $$A\_1$$ had haven a referrer, this referrer would have earn 3.84% of the earnings of the Creator (*80%x4.8%*).

<figure><img src="/files/mO5VLKPFztWB5fdm1z4N" alt=""><figcaption></figcaption></figure>

#### Use Case : Share purchase

Let’s take a case where the user $$C\_3$$ purchase a share of the content $$P\_i$$ at given price $$R\_i$$.

20% goes to the Frak Foundation. Then, the Creator earns a gross revenue before *referral reward* equal to 80% of $$R\_i$$.

As $$C\_2$$ is the referrer of $$C\_3$$ at level 1 and $$A\_1$$ referrer at level 2, $$C\_2$$ and $$A\_2$$ earn those amount :

$$
C\_2 : R\_{C\_2} = 10% \times R\_i
$$

$$
A\_1 : R\_{A\_1} = \frac{1}{2} \times 10% \times R\_i
$$

Thus, the Creator earns a net revenue equal to :

$$
Creator P\_i : R\_{P\_i} = (80% \times R\_i) - (R\_{C\_2} + R\_{A\_1}) = 65% \times R\_i
$$

#### Use Case : Earnings thanks to the consumption

Let’s take a case where the user $$C\_3$$, owning a [Diamond Fraktion](/frak-protocol/creator-work-minting/initial-content-minting.md) of the Content $$P\_i$$, watches to the content $$P\_i$$. The Creator earns the revenue $$R\_i$$.&#x20;

Then,

* the Creator shares 35% of $$R\_i$$ with $$C\_3$$.
* 10% of $$R\_i$$ go to in the *Content Pool*.
* 6% of $$R\_i$$ go to the *Referral Pool*.

As $$C\_2$$ is the referrer of $$C\_3$$ at level 1 and $$A\_1$$ referrer at level 2, $$C\_2$$ and $$A\_1$$ earn those amount :

$$
C\_2 : 6% \times R\_i
$$

$$
A\_2 : \frac{4}{5} \times 6% \times R\_i = 4.8% \times R\_i
$$

Thus, the Creator earns :

$$
Creator : (100%-35%-6%-4.8%) \times R\_i = 44.2% \times R\_i
$$

#### General Formula

$$
\left(\frac{4}{5}\right)^k \times 6% \times R\_i
$$

<div><figure><img src="https://s3.us-west-2.amazonaws.com/secure.notion-static.com/d9069422-913f-4b91-bbbd-7dedc94940f1/Untitled.png?X-Amz-Algorithm=AWS4-HMAC-SHA256&#x26;X-Amz-Content-Sha256=UNSIGNED-PAYLOAD&#x26;X-Amz-Credential=AKIAT73L2G45EIPT3X45%2F20220929%2Fus-west-2%2Fs3%2Faws4_request&#x26;X-Amz-Date=20220929T083307Z&#x26;X-Amz-Expires=86400&#x26;X-Amz-Signature=d74523e0bb3d35ffa018871b2abbdcc05d255605ecc99547dd16f46501fb5583&#x26;X-Amz-SignedHeaders=host&#x26;response-content-disposition=filename%20%3D%22Untitled.png%22&#x26;x-id=GetObject" alt=""><figcaption></figcaption></figure> <figure><img src="https://s3.us-west-2.amazonaws.com/secure.notion-static.com/934a12b8-5068-4182-8c5d-d83ab206edfc/Untitled.png?X-Amz-Algorithm=AWS4-HMAC-SHA256&#x26;X-Amz-Content-Sha256=UNSIGNED-PAYLOAD&#x26;X-Amz-Credential=AKIAT73L2G45EIPT3X45%2F20220929%2Fus-west-2%2Fs3%2Faws4_request&#x26;X-Amz-Date=20220929T083324Z&#x26;X-Amz-Expires=86400&#x26;X-Amz-Signature=2029a5b49e40d68b7c630bdfe5eff1b26008191b7d4b6e222cfc6f98c770e588&#x26;X-Amz-SignedHeaders=host&#x26;response-content-disposition=filename%20%3D%22Untitled.png%22&#x26;x-id=GetObject" alt=""><figcaption></figcaption></figure></div>

The share of earnings given to all the referrers :

$$
\sum\_{k=1}^{n}\left(\frac{4}{5}\right)^k \times 6% \times R\_i
$$

<div data-full-width="false"><figure><img src="/files/lwIbyC2RUKHyjfi3LW3d" alt=""><figcaption></figcaption></figure> <figure><img src="/files/dqyW7uYGrMa1tly8o3ov" alt=""><figcaption></figcaption></figure></div>

{% hint style="warning" %}
The Share of revenue given to the referees cannot exceed 30% ($$n=\infty$$)
{% endhint %}


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