Perhaps showstopping problems will come up.
What do you mean by "perhaps"? We already know it doesn't work without centralized timestamping. PoW and PoS in this design do pretty much nothing to secure the network, and even if some algorithm will be invented to fix it, it would be simply another currency since rules will change dramatically.
it will be quite valuable to know whether the underlying protocol works as advertised.
Well, yeah.
Proper way to do this: discuss algorithm beforehands, try the idea on a disposable testnet first, and only then release it as a "permanent" currency.
Improper way to do this: release half-baked, not well thought out version as a currency.
Now thinking about it, WHY would you do it in the improper way if not for pump & dump? I see absolutely no other reasons.
High PoW mint rate is also great for pump and dump: this way people can just use existing mining infrastructure to get coins, thinking that they will be valuable one day, and thinking that they are doing something worthwile.
Even if Sunny King has good intents and is just delusional, he behaves EXACTLY like pump-and-dumper, I can't think of a better scheme. (Well, PoS which would actually work would be better, but it would take much more time to develop a working scheme.)
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