(short and to the point)
Inviting friends through Spiral Knights give rewards to the inviter and invitee.
Reason: because there are some people who would spread the word of Spiral Knights, but choose not to. This is aimed at convincing them.

The rewards would be in the same vein as the following:
-60 prestige for both inviter and invitee
-Recruited Crest accessory bound to the new comer,
-Recruiter Crest bound to the invitation sender (upon first invite)
-Recruited Recruiter achievement* if the new comer invites a friend

I feel this should be a draw to invite others to the game. The rewards aren't made to be something to abused highly, other than the 60 prestige, which until proven otherwise, isn't game changing. The badges, are no worse than the proto crest, especially if only one of each can be earned.

*The achievement idea, to avoid leaving existing players out, would only work if all existing players count as having been invited.