Sorry for taking so long to respond. Between development and support questions, I had put this "big analytical post" in the back of my mind to deal with it when I had a little more than a few free moments. The decay discussions are always pretty big
In any case, you present the analysis from a different perspective. You're right, the earned will almost certainly decay faster than the spent, and the decay rate from day-to-day (and week-to-week) will be variable (sometimes decaying positively after a huge portion of points get spent). But this effect is reduced a bit when you employ the use of a "Full Period" (allowing each point earned/spent to remain at full value for X days). This gives your users time to spent their points before they get hit with decay. When users are getting decayed, the points that are decaying are
old points that are decaying, and not the recently earned points.
Ultimately, the key philosophy into the decay system in it's current implementation is this: "recent events are more important than past events." If you disagree with that statement, that's fair, and the decay in it's current form might not be for you and your guild. But it's important to remember that any system of decay will almost always affect the veterans more than the newer members, since the veterans in most systems will almost always have more DKP to decay. A tax-based one (say 10% per week), will take off more points from someone with 80 points than someone with 8 points. It's just a little easier to comprehend "10% of your total per week" than it is to comprehend "an accelerating rate of decay on each individual earned and spent point, each decaying independently of the other" (there's a lot to understand in that sentence). But it
is absolutely transparent (all data and information is completely revealed), it's just a little hard to comprehend. (particularly, when you're trying to think in aggregate).
To understand our decay system, it's easier to understand when you look at a single event (a single loot receipt, or a single raid attendance), and see how the points drop on that one attendance, independent of every other attendance or loot. Then simply realize that you've got a bagful of events that are decaying based on their initial date, and each is decaying independently.
Decay does have the side effect of controlling inflation by constantly working to reduce the points of everyone, affecting more severly those who've earned more than they've spent. Conversely, those who've spent more than they've earned will actually benefit a bit from decay (and that's a key side-effect: encourage users to spend to prevent hoarding)
It's important to realize that the
only way to completely eliminate the effects of decay (where points are reduced more for those who raid more) in any system of decay is for each player to end with a zero balance at the end of each raid. There's no system of decay out there (that I can think of), with the exception of the system
which our system does not use, though perhaps this could be a method that gets employed - but then this method will not curb hoarding points, it just keeps players attending and earning more.
"decay only those who are inactive" that doesn't penalize more heavily those players with more points. Our current system of decay accomplishes both with a single formula - it keeps players attending, because if they don't attend at least some raids, they won't be able to hold onto their points for terribly long, and it also keeps players from hoarding points, because the longer they go without spending, the harder it will be for them to keep up with the decay when they start decaying hard (without the
Behind the scenes you can think of it as a fight between the spent and earned decay rates, pushing eachother around for dominance. The earned points are decaying, lowering the players' points, while the spent points are decaying, increasing the players' points, and the difference, from day to day, is the daily decay rate
spent items decaying in reverse to offset the daily change).
On the other hand, if your primary concern is simply to reduce inflation, the "tax" based method that's coming up is probably the best approach for you. This will simply look at someone's current DKP, and reduce it by x% every y days. It'll do this for all players and all at x%, making it very easy to understand, and having the nice side-effect of not changing the ordering of players (which is one side-effect of the current aggregate decay rates, which in aggregate, become quite variable).
My guess is the DKP tax will become the more popular approach to decay on this system primarily because it's
in that the rate is consistent for everyone at all times
regular, understandable, and doesn't mess with the ordering, while at the same time, accomplishing the key goal of limiting inflation.