1% per day is too much.. that's all I have to say.

How about after a period of good behavior, a member can petition to have their warn level lowered by 5%, 10%, or something? (with maybe a 30 day waiting period in between petition attempts) Otherwise, a very offensive member could come here, do damage, and then go inactive for awhile, and the slate would be wiped clean for their return. Also, it would be up to the judgment of staff, and the member would have to show genuine progress rather than exploiting a built-in loophole.

I am totally in favor of a warn system, btw.

Petitions would be an absolute mess, including "OMFG WTF WHY WAS MINE DENIED?!?! FUCK YOU!!".

If there is warn decay, it should be automatic, and slow. I mean, I think it's reasonable to say that someone who is warned for spamming deserves to have it off their record one year later if they haven't done anything else wrong. If they want to be a sleeper abuse account, go ahead, once a year is pretty seldom.

Well, it's high time these kiddos learn how it feels to take the time to write a proposal about something and see if it works or not. That stuff will come in real handy later in life. ;p

Proposals would be too annoying, moderators would have to view them all, we want to make this as automated as possible.

I would agree with the comments calling for sooner repercussions (e.g. auto suspension at 50%), but I think there's a much more straightforward way to implement that kind of warn system: either have a 3-strike out or a zero-tolerance policy. Give the culprit one or two warnings and then give them ye olde permanent boot. They can learn the rules of sensible posting with someone holding their hand at another forum that can afford to waste time on them.

EDIT: By the way, the warnings mentioned by my suggestion would decay at the rate of 1 per infinity.

No it wouldn't be too annoying. You're just lazy.

1% a day is too fast. 1% every 2-3 days would be best.

This.

Well, I'll just leave this with I'm all in favor of the warn system.
Question, how did the v4 warn system work?

20% warns that did not decay. You could receive one warn and/or a fine of minerals or post count depending on the severity of the offense. Severe offense also warranted immediate suspension. If you reached 100% warn, you faced a mandatory suspension which was usually between 3 and 30 days depending on past logs, and then had your warn level reset to 20n% after the nth time of hitting 100%.

It worked just fine for keeping people in line.

Proposals would not be annoying if done properly by the users. What would be annoying is, like DT_Battlekruser said, all of the "OMFG WTF WHY WAS MINE DENIED?!?! FUCK YOU!!" that may almost certainly arise.

Maybe for low warns nothing is needed and it slowly decays, but then if you have a really high (maybe, as an arbitrary number, 70%) warn you can petition. That seems fair to me because it could bring out those who may want to stay (and not just trolls), so then moderators (and, perhaps, users) could decide "Do we really want to keep this person here?" If decided to stay thier warn decays, else they get banned, suspended, or whatever action is deemed appropriate. This wouldn't get all cluttery because a very small population ever gets really high (that I've observed) and then all the minor offenses are dealt with automatically.

(By the way, I'm just throwing out a random idea that puts both automation and petitioning/proposals together. I do agree with most of what Falkoner has been saying.)
Sounds really nice. The users can't just hide away until 0%, you can see the recent offenses to base punishments off of, and then you can also see the everything the user has done for more extreme decisions.