Go to 'Settings' > Programs > MLM.
Here, you will see an overview of existing levels within your program, as well as the option to create new ones. Creating a new level will enable the MLM feature, so your affiliates will be able to recruit others beneath them as well as earn commission for the conversions driven by those in their downline.
This article explains the three ways you can set up relationships between your affiliates.
Here's a quick video of the process!