I couldn't think of much, the only idea I had was to make is so when people join they are in the tutorial and chat is disabled when they are asked for the referral , that would stop people from paying new players to put as a referral. As for the problem of alts if you have one or a couple chances are they are on the server already and getting friends to afk there is nothing you can do, there is a slight chance they may play around and like it though. The prize for referring 1 person wouldn't be to big and for the end prize the staff can check that none of the accounts are on the same ip.
~ @TechnoTyson
I strongly disagree with disabling chat in Tutorial, because then it means the community cannot even welcome a new player. And by friends, I mean where you have access to their account, as well.
Rather than paying for playing for an hour, I believe the referral program could be linked to forums. After all, it's illegal to create forums alts already. This would encourage players already on the server to go deeper, which solidifies the bond they're already forming. All that'd need to happen is adding that as part of your forums registration (just put in the IGN of the person who referred you), and then when that person reaches a certain number of posts (I'm thinking 50), it could reward the player who referred them in-game. Alt abuse would be much more controlled if it were forums, because of the linked email, and easiness of spotting forums alts.