From Second Life Wiki
What is Traffic? (Dwell)
Linden initially introduced "traffic" or "dwell" as a way to reward residents who create popular locations.
The current traffic algorithm
In May 2008, Linden Lab provided a description of the traffic algorithm, which they assure is still current:
How ‘traffic’ works:
- Every user gets 1 point of dwell to give out during the 24 hours between midnight and midnight. Any parcel of land that the user spends more than 5 sequential minutes on gets counted as a place that they spent time.
- Parcels owned by the resident (or group) are counted as if they were the same parcel. The user's 1 point is then evenly divided between those parcels
- So, if was online for 1 hour and spent 20 minutes on resident A's parcel and 40 minutes on resident B's parcel, resident A would get 0.333 from me and resident B would get 0.666 from me.
- Alternately, if I only spent 5 minutes online and spent all of it on resident A's land, she would receive 1 point from me. Those raw point totals are what is reported in the find window.
Traffic does not take into account the length of time someone spends on a parcel, but rather is based on the proportion of their inworld time spent there.
As you can see, the traffic measurement is confusing to understand and doesn’t necessarily result in useful statistics for Residents, which is another reason why the Popular Places tab is being replaced with the Showcase. (Source, LewisPR on behalf of Linden Lab, 16 May 2008)
How the algorithm evolved into its current form
The original idea was to reward builds of ‘good’ content. We first tried to detect "good" via Voting Stations -- green pillars placed in-world on which a user could click to indicate a parcel was "good". Only one vote per day per user per parcel was allowed. We would then tally up the votes nightly and distribute L$.
This didn't work well because users would gang up, fly around to all their friends' parcels and click the voting stations. Or they created vote farms - collections of 16m2 parcels each owned by a different person each with its own vote box, to make voting for friends easier. So we decided to replace it.
Dwell (subsequently renamed to ‘traffic’) was an attempt to limit how many "votes" a single user could provide in a day. The idea was to give each user one "aggregate vote" per day, and divide that contribution up among all parcels that user visited. Visits under 5 minutes were discarded as "just passing through".
(Source, LewisPR on behalf of Linden Lab, 16 May 2008)
- In 2006 traffic was changed to be a minute an avatar spends in a parcel (Ref: ) but only for avatars that do not move to another parcel (for at least five minutes) within the 24 hour data-collection period. Otherwise, it still works largely according to the pre-2006 model according to the Lab as of May 2008 (Ref: )
- The traffic of all avatars count, regardless of their membership status or if a resident or bot
- Mainland sims limited to 40 avatars generally can't have traffic over 57,600, while island estates with 100 avatar limits usually won't be over 144000, but those limits can be exceeded by avatars relogging back into a sim
- Traffic also determines which "Popular Places" are selected each night. You can see these by clicking on the Find button and selecting the "Popular Places" tab. They also appear on the Map as a "thumbs up" icon. (Note: as of viewer version 1.20, "Popular Places" is no longer included in the search system.)
- If you want to start another tedious argument about whether this wiki page or the knowledge base or any other source of information including various Linden Lab employees is right please review this thread  and particularly this post  which conclusively proved, again, that traffic is one point per avatar per minute (barring some small questions about the timing of the mechanism that tracks the minutes)
Up to 2006
- Initially, Dwell was a fixed value of points for each Resident assigned by calculating the proportion of their SL day spent at each location in the world on a daily basis. Previously, a Resident needed to spend at least 5 minutes in one full chunk to give a parcel at least one traffic point.
- Linden Lab offered a $US reward to the 2% of landowners who receive the most dwell - in proportion to the dwell their properties received. In August of 2004, US$2,308 was distributed to 36 landowners. This was essentially seed funding in the earlier days of SL when even a popular build could still become economically unviable due to very low population numbers.
- In mid-2006, stipends based on dwell were removed as population growth provided an audience sufficient enough to support a more conventional economy in Second Life.