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As to the actual substance of the question, no, oppressing every small creature will not encourage format diversity or interesting game play

With all these ways to profit off tapped creatures, using them to destroy an opponent's creature for free makes this silly Among Us reference one to watch out for

On the other hand, its more expensive and unlikely to draw a removal spell from an opponent anyway

Oh, and it costs a thousand dollars

Looking at all the lower-layer things Allay allows us to do each time, creating more Spirit tokens is not one of them, and there are for more iterations of those loops than we have Spirit tokens at any given time