As the bottom line for manager is participation rate, managers who have been inactive for 2 cycles or above will lose their entire Kairo balance. Inactivity is defined as not making any trade.
If a manager joined Betoken with a relatively low initial Kairo balance, it's likely that they will lose interest and abandon their account, since they didn't put in much money to begin with. However, the stale Kairo owned by their account still represents control over some portion of the fund assets. This means that as the number of inactive managers rises, a non-negligible portion of the investors' capital will simply sit in the fund, not being invested in anything, which would negatively impact the efficiency of Betoken.
If a prominent manager with a large amount of Kairo unfortunately passes away, and they made no arrangements to pass on their manager account to someone else, the capital under their management will never be invested in anything, which may greatly reduce the efficiency of Betoken.