It is a way to stimulate growth of the network while rewarding those who help doing so. By inviting other people (or mining, but mainly through the spawning of a community) you get to increase a rank according to a certain algorithm. The higher you get in that rank, the more probable you can partecipate in the lottery held at each block which gives half its rewards out to 10 winners. You don't have to mine at all in that block, but it works like mining because it follows the same principles of probability. It is a nice way to try a different route from POW and POS imho, and since its version 2.0 most real members are getting some rewards each day, thus the network grows more healthly than usual cryptos.