To ilustrate the behaviour we experience look at the blocks below. At 137136 we had a diff of 412 and because the block preceding this took two hours the diff dropped to 118. But the max drop is 1/3 so it should have dropped to 138 and not 118. The dif lowers and despite blocktimes of tens of seconds it lowers and lowers. Till 137159 then the calculation says hoooo fellas this is too fast and it raises the diff from 29.8 to 162.1 not exactly the max three times that was in the DGW design... So why does is diff adjusted more than the DGW design? And second it can behave much better if it is a weighted average instead of a plain one.
+1 for the detailed info, mate. I'm with you 100%.
I really do believe either looking at less blocks for the average, or creating a weighted average is the way to go. Additionally, there needs to be a limit in the amount of difficulty increase/decrease so we're not throwing the difficulty all over the place.
Again- less extreme changes that happen more often.
-Fuse