Because people got into $FEI for the sole purpose of getting a $TRIBE airdrop, and because the protocol itself has no price floor because it does not allow $FEI holders to redeem $ETH, the immense sell pressure is leading $FEI to trade below peg, with the associated huge burn penalties. Reweights obviously don’t change this situation as people have no faith in $FEI’s ability to hold the peg sustainably. Reweights only benefit bots who capture the opportunity to sell at 1 dollar.
The protocol is overcollaterized. So every $FEI holder who wants to exit and get 1 dollar worth of $ETH could do so without threatening the solvency of the system. However, this would obviously be at the expense of the PCV. The big PCV is probably one of the only current assets of this protocol and $TRIBE holders may not be happy with $FEI holders exiting comfortably. When $FEI holders sell with a huge burn penalty, the protocol is essentially capturing some value because the mint rewards are always lower than the burn penalty. $TRIBE holder have control over the PCV so they may not be unhappy with the fact that $FEI holders sell at a huge loss and therefore may oppose the idea of allowing $FEI holders to exit at 1 dollar. In that sense, incentives between $FEI holders and $TRIBE holders are not aligned.
But in another sense, the incentives between $TRIBE holders and $FEI holders are aligned. $TRIBE holders know that the sell pressure is not going to stop. For the sell pressure to stop, $FEI would need to have liquidity around 1 dollar. This can’t be achieved as long as $FEI is not redeemable for $ETH. So $TRIBE holders can allow $FEI holders to exit now or see the sell pressure continue for months. In the second scenario, the protocol may capture more value. But the faith in the project by market participants will obviously be non existent and $TRIBE will lose all its value. The most rational thing to do for $TRIBE holders is to allow $FEI holders to exit and vote for a revamped system that actually incorporates a price floor and a price cap, which is the only way a stablecoin can work.
My proposal is the following : $FEI holders can redeem 0.95 dollar worth of $ETH for 1 FEI. That means the protocol PCV will not be completely drained even if all $FEI holders decided to sell and the protocol could restart on healthy grounds.