How Web3 Projects Design Compliance User Incentive Mechanisms

With the widespread application of user incentive mechanisms in various products, the boundary between "rebate" and "pyramid selling" has sparked extensive discussion. This article will explore this issue from a legal perspective and provide Compliance suggestions.

Case Analysis

An NFT platform categorizes NFTs into five levels, each corresponding to different computing power and prices. The platform offers commissions to users who refer others to purchase NFTs, but can only provide them to one referrer whose level is higher than that of the purchaser.

Does the commission mechanism of the platform constitute pyramid selling? We analyze from the following aspects:

1. Sources of Profit: The platform primarily profits through the sale of NFTs and transaction fees, rather than relying on new user membership fees.

2. Compensation basis: The commission comes from the actual profit sharing of NFT sales, rather than the number of downline members.

3. Hierarchical structure: Adopts a single-line direct push model, with no multi-layer nesting.

4. Product Value: NFT pricing conforms to market rules, possessing real value and liquidity.

In summary, the rebate mechanism of this platform is fundamentally different from traditional pyramid schemes and does not constitute pyramid scheme crimes.

Suggestions to Avoid Commission Mechanisms Being Involved in Pyramid Schemes

1. Prohibit setting "entry fee"

• Users can register as promoters without paying any fees.
• Avoid disguised "entry fees", such as higher commission rates for premium members, etc.

2. Commission calculation should be based on actual sales performance.

• Clearly state that the commission comes from the profit sharing of actual transaction orders.
• Strictly distinguish between "promotion" and "referral", commissions should be directly related to actual transactions.
• Provide promoters with transparent commission source data

3. Adopt "linear" first-level commission or at most two levels of rewards

• It is recommended that commissions are generated only between direct promoters and the consumers they bring in.
• If a two-tier reward system is adopted, multidimensional indicators should be designed, rather than simply rewarding the development of subordinates.

4. Ensure that the transactions are authentic, legal, and sustainable.

• Provide genuine and valuable goods or services at reasonable prices.
• Ensure the authenticity of transactions and establish a comprehensive after-sales service.
• The profit model is sustainable and does not rely on new user funds.
• Promote with a pragmatic approach, avoiding exaggeration of returns or promises of "easy profits".

Conclusion

Compliance-based rebates are legitimate marketing strategies, while illegal rebates may constitute a crime. For a project to develop in the long term, it must return to the creation of real value, winning through products and services rather than relying on layers of rebates. Only by adhering to compliance boundaries can one achieve stability and long-term success.