$FIAT is minted via collateralized debt positions, similar to how $DAI is minted in the MakerDAO system. It is not an "algorithmic" stablecoin (e.g. UST, sUSD) insofar as it does not rely on endogenous collateral to back the circulating supply of $FIAT. Deviations from a secondary price of $1 should be considered indicative of either excess $FIAT in circulation or unsatisfied demand for $FIAT. That is to say, because of the less liquid nature of the collateral accepted by FIAT DAO, the potential for deviation from the $1 target is greater than similar systems which only accept spot assets.