Being exposed simply means that you can attack the person you are exposed to/that you have exposed with a significantly decreased attack time and Gold cost. Also if you have someone exposed, a percentage of the Gold that they get from ransoming minions is given to you. Exposure can happen if you leave an Alliance, if you fail to defend yourself against a PvP attack and if you ransom off a Lord, Lady or Knight you may be exposed to a random person who owns a Gold Bag.

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