Φ$ has a soft-peg to the value of the US Dollar, and its price are constantly rebalanced to ensure the 1:1 ratio to the USD is maintained. It does it with the help of the following mechanisms:
Supply rebasing (aka burning, minting tokens),
Increasing and decreasing of the backing reserves' ratio,
Open market price arbitrage,
PHI Labs is also working to offer officially supported fiat onramp and offramp options for users to buy in and cash out of Φ$ on a fixed 1:1 ratio to the US Dollar, which will further strengthen its pegging on-chain.
Φ$ is backed by Φ at a minimum of a 5:1 ratio. That means that for every $1 worth of Φ$, there are $5 worth of Φ in reserves backing it.
All these reserves can be audited in real-time by the community and the treasury wallet address will be made available to the general public.