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We've tried lowering the alliance limit, it doesnt do anything extra.. We dont automatically get new alliances popping up as the playerbase only has so many people willing to take the time to be a HC (or capable of doing it), then you've got to find people willing to DC, just having a smaller alliance doesnt mean you need less DC coverage.

The alliance limit is fine as it is, its not too big that no-one can reach it and its not too small that every top alliance is handicapped badly by it.

As you said, most alliances only have 20-25 core.. These are the active members who participate to keep the alliance running, either through DC'ing, BC'ing, HC'ing or high scoring. The rest are casual or alittle bit more inactive than the alliance would like, if you lower the tag? what exactly do you think will happen? the core will remain the same but the more inactive or casual players will be booted out (hint: they're more inactive or casual and so wont just go and create a new alliance, as theyre not active enough).

It also doesnt make the alliance ranks more competitive, as you've still got the same Cores vs each other.