In a sense, it's hard to apply the model directly to this proposed difficulty adjustment formula because the model I am using presupposes some kind of predictable difficulty over time - but apart from that, and in a casual application of the model and observing the coin markets - I would predict the coin would have a very randomly looking profitability graph, and it would land at random times, for a couple of minutes at a time, at the top of profitability charts - and get random spikes of major hashing power - and long-term miners would see on-going profitability of less than LTC, while sophisticated coin hoppers find ways to monitor the blockchain and know exactly when to jump in and snipe the few coins that can be had before the averaging formula move the difficulty out of rage of profitability again. There are coins like Galaxycoin exhibiting this kind of wild fluctuation in difficulty/profitability, and the reputation of that coin was not helped by being known for this type of fluctuation. I do not see this as an immediately catastrophic change like, like the suggestion to cap difficulty level changes to something narrow (which has a good chance of killing the coin in the aftermath of the first significant spike in the value of the coin in the markets) - but I do see it can drain 1) the reputation of the coin from the fluctuation and 2) enthusiasm for the coin among miners who see consistent profitability below LTC. These may then prevent the coin from gaining momentum to see any significant value spikes to begin with - and would tend to linger long-term as a low value coin without much hope of increasing in value. But like I said, this one is hard to predict because it does not fit the model I am using, and this is partly conjecture on my part. I apologize if I misrepresented your formula or intent in any way.

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