Discount by Affiliate

A couple of options come to mind.
There is one general issue that may cause difficulties, it depends on how long you pay commission to the affiliate for. Unlimited duration, N sales or N days. Either of the latter two do not match nicely with discount codes. N days is particularly difficult to match, but N sales could be managed by having a matching number of discount codes published on the affiliates site, with the added advantage to you in that he would have to give more space to your links/site and the added advantage to him that people are likely to revisit his site again to get the additional codes.

The two options that come to mind are :-
- Create discount code(s) and give it to the affiliate, he can post it on his website for the customers visiting via his site to use. It's unlikely that people visiting via other affiliates or direct will become aware of the discount code. although that will happen over time. You will have to watch out for when this starts and take action to limit it.

- Create some custom code to detect the affiliate ID and automatically add the new customers with that present to a customer pricing group which has a discount automatically applied.  One issue with this is that without manual intervention they will continue to receive the discount for ever.

Whichever route you go (if either) another issue to be aware of is that the affiliates %age is based on the total of the sale so if the customer gets a 5% discount the affiliates commission is reduced automatically by 5%.
e.g.
$100 sale at 20% commission = $20
$100 sale - discounted to $95 @ 20% commission =  $19.  (Total $24 discount)
To give the same total of $20 overall the commission rate would have to be adjusted.
$100 sale - discounted to $95 @ 15.8% commission =  $15.  (Total $20 discount)

The simplest and cleanest route is a discount code (or several if needed).