The current fast difficulty adjustment scheme can lead to perverse incentives giving rise short periods of turbo mining by aggressive mining pools. This results in long (>60 min) periods of no blocks when difficulty is high which makes it frustrating for users moving coins to exchanges where confirmations is still the standard. We can disincentivize this behavior with only small impact to steady miners.
This patch introduces an optional Avalanche post-consensus policy called Early Blocks Penalty. The scheme is simple: A difficulty penalty is applied to blocks that arrive within the penalty window from the previous block. If the block hash is not better than this new target, the block will be parked. Avalanche will determine finality. A majority of Avalanche stakers will need to enable this policy for it to be effective on mainnet.