I say mandate relatively small slick spec tires, steel brakes, one front and one rear wing, a minimum weight limit, and other than that, anything goes. I want to see what kind of crazy sh** they would come up with on those kinds of budgets. 25,000rpm V8 vs turbo V10 vs some crazy AWD thing with a boxer 4 in front and a V6 in back...
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Sounds like a modern day incarnation of Can-am, (which I would love to see) but not so much F1. Formula 1 is called a Formula for a reason, having multiple formulas in a race sorta kills that.