diff --git a/app/controllers/api/v1/callbacks_controller.rb b/app/controllers/api/v1/callbacks_controller.rb
index d0d3484..943b4ef 100644
--- a/app/controllers/api/v1/callbacks_controller.rb
+++ b/app/controllers/api/v1/callbacks_controller.rb
@@ -71,6 +71,11 @@ def render_failure(error=nil)
   end
 
   def mobile_provider_params
-    params.require(:user).permit(:uid, :country_code, :mobile, :name, :id_token)
+    params.require(:user).permit(:uid,
+                                 :country_code,
+                                 :mobile,
+                                 :name,
+                                 :id_token,
+                                 :referral_code)
   end
 end
diff --git a/app/controllers/api/v1/referrals_controller.rb b/app/controllers/api/v1/referrals_controller.rb
new file mode 100644
index 0000000..87f4e06
--- /dev/null
+++ b/app/controllers/api/v1/referrals_controller.rb
@@ -0,0 +1,15 @@
+class Api::V1::ReferralsController < Api::BaseController
+  def create
+    if referral = Referral.create(referrer_id: current_user.id)
+      render json: referral, status: :created
+    else
+      render_error(:unprocessable_entity, referral.errors.full_messages.to_sentence)
+    end
+  end
+
+  protected
+
+  def referrals_params
+    params.require(:referrals).permit(:)
+  end
+end
diff --git a/app/controllers/api/v1/sessions_controller.rb b/app/controllers/api/v1/sessions_controller.rb
index 70aede3..c7cab45 100644
--- a/app/controllers/api/v1/sessions_controller.rb
+++ b/app/controllers/api/v1/sessions_controller.rb
@@ -28,7 +28,12 @@ def create_params
 
   def create_session_for_user
     ensure_one_active_session
-    @session = Session.create!(create_params)
+    pending_referral = Referral.pending.for_candidate(current_user).first
+    create_params[:rewards] = pending_referral.reward if pending_referral
+    ActiveRecord::Base.transaction do
+      @session = Session.create!(create_params)
+      pending_referral.rewarded!
+    end
   end
 
   def ensure_one_active_session
diff --git a/app/models/referral.rb b/app/models/referral.rb
new file mode 100644
index 0000000..1e08328
--- /dev/null
+++ b/app/models/referral.rb
@@ -0,0 +1,24 @@
+class Referral < ApplicationRecord
+  CODE_PREFIX = 'STAYHOME'.freeze
+  REWARD_VALUE = 1000
+
+  enum status: { pending: 0, rewarded: 1 }
+
+  scope :for_candidate, ->(user) { where(candidate_id: user.id) }
+  scope :for_referrer, ->(user) { where(referrer_id: user.id) }
+
+  before_create :generate_code
+
+  private
+
+  def generate_code
+    new_code = "#{CODE_PREFIX}-#{SecureRandom.hex[0, 4].upcase}"
+
+    if Referral.exists?(referrer_id: referrer_id, code: new_code)
+      generate_code
+    else
+      self.code = new_code
+      self.reward = REWARD_VALUE
+    end
+  end
+end
diff --git a/app/models/user.rb b/app/models/user.rb
index dd1d018..f1f4201 100644
--- a/app/models/user.rb
+++ b/app/models/user.rb
@@ -20,6 +20,8 @@ class User < ApplicationRecord
   has_many :wallet_transactions, dependent: :destroy
   has_many :notification_tokens, dependent: :destroy
   has_many :sessions, dependent: :destroy
+  has_many :sent_referrals, class_name: 'Referral', foreign_key: :referrer_id
+  has_many :received_referrals, class_name: 'Referral', foreign_key: :candidate_id
   before_validation :remove_devise_validations, unless: :email_auth_validations
   after_validation :reverse_geocode
 
@@ -48,10 +50,16 @@ def self.onboard_from_mobile(params)
     user = User.find_or_initialize_by(mobile: params[:mobile])
     user.name = params[:name]
     user.identities.find_or_initialize_by(provider: 'mobile', uid: params[:uid])
+    update_referrals(params[:referral_code]) if params[:referral_code]
     user.save_provider_auth_user
     user
   end
 
+  def update_referrals(code)
+    referral = Referral.find_by(code: code, candidate_id: nil)
+    referral.candidate = self if referral
+  end
+
   def password_complexity
     return if password.blank? || password =~ /^(?=.*?[a-z])(?=.*?[#?!@$%^&*-]).{8,70}$/
     errors.add :password, :password_complexity_error
diff --git a/app/serializers/referral_serializer.rb b/app/serializers/referral_serializer.rb
new file mode 100644
index 0000000..4e18014
--- /dev/null
+++ b/app/serializers/referral_serializer.rb
@@ -0,0 +1,3 @@
+class ReferralSerializer < ActiveModel::Serializer
+  attributes :code
+end
diff --git a/app/serializers/user_serializer.rb b/app/serializers/user_serializer.rb
index 3af6371..9329308 100644
--- a/app/serializers/user_serializer.rb
+++ b/app/serializers/user_serializer.rb
@@ -1,6 +1,6 @@
 class UserSerializer < ActiveModel::Serializer
   attributes :id, :name, :email, :mobile, :profile_picture_url, :wallet_balance,
-             :home_duration_in_seconds, :lat, :lng
+             :home_duration_in_seconds, :lat, :lng, :total_referral_rewards
 
   def home_duration_in_seconds
     active_session = object.active_session
@@ -20,4 +20,8 @@ def wallet_balance
       object.wallet_balance
     end
   end
+
+  def total_referral_rewards
+    Referral.rewarded.for_referrer(object).sum(&:reward)
+  end
 end
diff --git a/config/routes.rb b/config/routes.rb
index cd45367..5d685d5 100644
--- a/config/routes.rb
+++ b/config/routes.rb
@@ -27,6 +27,7 @@
       resource :home, only: :index
       resource :user, only: :update do
         get :profile, to: 'users#show'
+        resources :referrals, only: :create
       end
       resources :notification_tokens, only: :create
       post '/sessions/ping', to: 'sessions#ping'
diff --git a/db/migrate/20200513195719_create_referrals.rb b/db/migrate/20200513195719_create_referrals.rb
new file mode 100644
index 0000000..560f280
--- /dev/null
+++ b/db/migrate/20200513195719_create_referrals.rb
@@ -0,0 +1,13 @@
+class CreateReferrals < ActiveRecord::Migration[5.2]
+  def change
+    create_table :referrals do |t|
+      t.references :referrer, index: true, foreign_key: { to_table: :users }
+      t.references :candidate, index: true, foreign_key: { to_table: :users }, null: true
+      t.integer :status, index: true, default: 0
+      t.string :code, index: true
+      t.timestamp :expires_at
+      t.integer :reward
+      t.timestamps
+    end
+  end
+end
diff --git a/db/schema.rb b/db/schema.rb
index 2d72474..7a6bc1a 100644
--- a/db/schema.rb
+++ b/db/schema.rb
@@ -10,7 +10,7 @@
 #
 # It's strongly recommended that you check this file into your version control system.
 
-ActiveRecord::Schema.define(version: 2020_05_10_184356) do
+ActiveRecord::Schema.define(version: 2020_05_13_195719) do
 
   # These are extensions that must be enabled in order to support this database
   enable_extension "plpgsql"
@@ -70,6 +70,20 @@
     t.datetime "updated_at", null: false
   end
 
+  create_table "referrals", force: :cascade do |t|
+    t.bigint "referrer_id"
+    t.bigint "candidate_id"
+    t.integer "status", default: 0
+    t.string "code"
+    t.datetime "expires_at"
+    t.datetime "created_at", null: false
+    t.datetime "updated_at", null: false
+    t.index ["candidate_id"], name: "index_referrals_on_candidate_id"
+    t.index ["code"], name: "index_referrals_on_code"
+    t.index ["referrer_id"], name: "index_referrals_on_referrer_id"
+    t.index ["status"], name: "index_referrals_on_status"
+  end
+
   create_table "questions", force: :cascade do |t|
     t.string "name"
     t.boolean "active", default: true, null: false
@@ -148,6 +162,8 @@
     t.index ["user_id"], name: "index_wallet_transactions_on_user_id"
   end
 
+  add_foreign_key "referrals", "users", column: "candidate_id"
+  add_foreign_key "referrals", "users", column: "referrer_id"
   add_foreign_key "answers", "questions"
   add_foreign_key "sessions", "users"
 end