Another thing should be considered is that whether we should have limitations on maximum number of sMerits to send or received each day for each user, and from each users to another.
sMerits limit for given day and limits for each user can be good way to balance merit rating. If the idea behind merit system to promote community and quality post then limits will be the ideal way.
there is no need to limit on sending/receiving merits, by default it would be limited by the availability of sMerit they have
awarding merits in large number between two users (or set of users) will only raise suspicion, specially for non-quality posts
but maybe blocking certain condition such as repeatedly giving merit to the same person is not allowed
giving merit to the same person becomes available again after spreading merits to 10 different users