To the Gulag with You! (Banishment Discussion)

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As others already mentioned, it's both a punishment and an opportunity. It provides an actual serious consequence for being defeated, thus giving people a good incentive to try and win, while also making for some fantastic writing material. After all, nothing tests one's character quite as much as being stranded in a hellish and hostile environment and it provides the banished character a justification to pursue a personal vendetta against the person that banished them.

That said, if I was in a position to banish someone, I'd probably ask them OOC if they were alright with it first. Although it is a good roleplaying opportunity, banishment is also a rather serious disruption to one's plans, especially if they are roleplaying with someone else. So in spite of the fact that banishment is a perfectly legitimate mechanic, actually banishing someone against their will might come off as somewhat of a faux pas.