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This is to address all upper ranks to somehow give a justice to jr. members or newbies who have posts which are eligible to earn the merits and I know that some of you are greedy of merits and let us not deny that. This is one of the reasons why most of the jr. members are getting tired to exert effort since when they have a good post, no one give them merits.
I believe you have wrote this under wrong assumption that senior members somehow have any use from hoarding sMerits. That is not the case, unless they are selling it which is another problem. You can only send sMerits and you rank up by the number of Merits received. Every 2 Merits you receive you will have one sMerit to send. Of course when you send sMerit the other person receives it as a Merit which keeps the cycle going. There is a loss of available sMerits (50%) in every Merit transaction and that is why theymos decided to appoint new merit sources (36 I believe) to keep the numbers flowing.
I have earned/received more than 180 Merits till now and given away almost all my sMerits, no point in hoarding. I try to keep up some small amount in reserve for truly exceptional posts or post that help me personally.
I think to be fair, my suggestion is that there should also be a requirement or pre-requisite tp give a minimum merit to other deserving person before leveling up to another rank.
This is actually not a bad idea, but not because of the reason you mentioned before. I believe that there are still quite a lot senior users not aware of the Merit system. This way they would have personal incentive to start using it. I am sure someone in this meta section already has some merit statistical analysis that has a number/list of such users