What exactly is the smerit decay rate or cutoff period after you have earned them?
As Little Mouse pointed out, AFAIK there is no smerit decay rate but if those smerits seems to be pointlessly staying with an individual for a large amount of time it would be good to decay them and reassign the same to any active merit source. Moreover just decaying the smerits are simply waste of time as they aren't really helpful in anyway to anyone. But instead of them being decayed, merit receivers might be forced to give away their smerits at some point.But on the other hand, if merit sources are not actively spending their smerits there is a decay or lessening of merits as far as I have seen. I constantly check through the Most generous members list from time to time, some were constantly sending 300+ for few months but recently even though they are active in giving (not up to the extent) away their source merits they have disappeared from the Most generous 30 day list. If anyone doesn't spend their merits, it's reducing the total merit circulation which certainly makes the merit receivers to rely on merit sources alone.
Giving away merits aren't minimised to merit source but every one of the forum user should give away their smerits for quality posts.
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I think the lower rank you are, the more important it is to "spend" your smerit imo. I think believe people merit "smerit hoarders" as much as those who give as much as they receive. What comes around goes around and all that. 
