This is a tried and tested method for MMO's and a successful one at that and I can see you've put some great time and effort into considering a reward for referral system, however;

Your idea as it currently is over-saturated and complex. Where players would have to try and get as many friends as possible, simply just to get more items, similar to your average Social Networking Game.

"To expand your farm, invite 50 Facebook friends to be your neighbour"


Some examples of current and much simpler MMO referral systems:

World of Warcraft


Meet the new recruit in Azeroth and enjoy special in-game benefits for a full 90 days:

Friend-to-friend summoning makes it easy to travel together
Bonus experience ensures faster leveling

If your friend/family member purchases a full copy of World of Warcraft and pays for a month of subscription time, you'll get 30 days of game time FREE!

If your friend/family member pays for two full months of game time, you'll receive an exclusive
Heart of the Nightwing

Aion

What do I get?
When your friend buys Aion (applies a digital or retail box serial code to an account), you get:
3 Major Ancient Crowns
5 Platinum Medals
15 Berdin's Amulets (50% bonus XP)
When your friend pays for a subscription for at least one month of Aion game time, you will be automatically credited with one month of free game time.


Less is more,
When it becomes too complex adding in things such as "Referal Points", it becomes less of a "Lets get my friends to play" and more of a "Holy poops, I really need all 30 of these items, I better conscript my friends or make some new accounts just to get it"

Food for thought,
Nom-Nom