The % from each affiliate each time they earn something probably would be the best option if it doesn't get too OP. For example: User2 uses User1's affiliate and User1 receives 10% of User2's income. How ever if User3 uses User2's affiliate, User2 gets 10% and User1 gets 9% since he's the one who invited User2. And so on... Obviously Steemit would have to come up with some kimd of formula, but you get the drill.
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That would get a little messy if U1 gets affiliate % from U3. I think it should just stop at U2 (although U1 would make less money..). It'd be hard to keep track of that