Each time I see this pop up I begin to wonder how it works and what it means by sMerit decay. How long can the sMerit last without getting decayed or is it only a write up? Has anybody's own decayed and how long did it take to happen. I'm curious and really want to understand what it means by sMerit decay and it's possibility and timeframe.
As far as I know,
NO, it doesn't decay (at least not to this date). Merit or sMerit isn't some radioactive isotope that decays over time.

But nobody can say for sure what will happen in the future. As others have already mentioned, admin can basically change the current policy at any given time, and make them decay over time.
There is an exception when it comes to merit sources. Theymos allocates each merit sources certain amount of sMerits every momth, for them to distribute throughout the month. Now if I understand correctly, if left unused, the sMerits will get a reset after the month is over. But we aren't talking about that here.
Certain users are designated as "merit sources". They can create new merit out of nothing, up to a limited number per month (which differs per source). I will not be posting a definitive list of merit sources (so that people don't bug them too much), though you'll soon figure out who they are if you pay attention.
There is currently no such thing as a "demerit". I'm hoping that the positive merits alone will be fine. I could add demerits pretty easily later on if necessary, though.