As someone who was heavily invested with FEI and deeply involved in all the discussions in their discord and discourse post-launch, I can say that the concerns about FEI today are based on a lack of knowledge about how and why FEI lost its peg. The main issues for FEI's launch were that: (1) as part of their initial sale, they awarded anyone who exchanged ETH for FEI with a proportionate share of airdropped TRIBE and (2) their original (now replaced) mechanism for keeping the peg involved something called "direct incentives" in their pool, which penalized folks for selling FEI the further it was from the peg.
First, because of the airdrop, the FEI launch was oversubscribed because many folks saw it as a low-risk way of getting a free airdrop (send eth, get equivalent amount of a stablecoin named FEI, get airdropped a proportionate share of TRIBE, sell your FEI back to ETH, profit). Problem was that everyone had the same plan so, immediately after launch, when everyone tried to sell their FEI back to ETH, the FEI price began to drop below the peg. Here's where the second issue arose. Because of the "direct incentives" mechanism, if you tried to sell FEI when it was below $1, the pool would automatically penalize you based on how far away from the peg you were selling. If it was 1% away from the peg, it would penalize you 2% when you sold; if it was 2%, the penalty would be 4%; 3% = penalty of 9%; and 5% off from peg would equal a penalty of 25%. Obviously if you sold when it was 10% off the peg, you'd lose 100%.
Because of the extreme demand to sell FEI back to ETH, people were willing to pay some penalty (but not a 100% penalty) so the price of FEI was continually between $.93 and $.97. This was unsustainable for a stablecoin intending to be pegged at $1. Through a series of governance proposals, the issues were resolved. First, the direct incentives mechanism was removed, which was artificially keeping the price above $.90. This dropped the price of FEI into the $.70s and $.80s as people were able to sell out if they really wanted to. Next, they instituted a mechanism to use the protocol controlled ETH (which was a huge war chest at this point based on the oversubscribed launch) to buy back FEI @ $.95 from anyone who wanted to sell at $.95. Just announcing this moved the price back up to $.95 because of arbitrageurs. Then they slowly moved this target closer and closer to $1 through a regularly repeating (every 4 hours?) pool rebalancing mechanism.
All in all, at this stage, FEI is a very stable stablecoin project. Its risk is that it's collateralized with ETH so if there's a huge crash in the price of ETH, it could theoretically become undercollateralized but it's sitting on over $500 million in protocol controlled value and this represents a 300% collateralization ratio so, in my opinion, it's in a very healthy spot. With its current peg mechanisms and its PCV, I would have no concerns about it being included in this pool.
