The concept of phazon is (probably) the intellectual property of Nintendo. Also, this description is partially taken from the wikipedia entry for phazon, found here.
Phazon is a liquid radioactive substance found on Ganymede, where it is believed to be produced by the core of the planet, then swells onto the surface. It is held in check by atmospheric pressure.
The substance is an electric-blue in color, and is lava-like in its consistency. It tends to arc electrical charges from its crests and troughs; it is not known if these discharges are dangerous in their own right.
It is known that some phazon evaporates in rare occasions, and such phazon rains down upon the planet's surface - such rain is preceded by blue clouds, an abnormality in Ganymede's atmosphere, and generally behaves as molten rain, with phazon's radioactive nature. Due to the unpredictable nature of the rains, most of Ganymede's inhabitants either dwell underground or develop countermeasures, if they are technologically advanced enough to do so (such as the tau).
Phazon is also known to be rather destructive to non-ferrous materials. Due to this, some tau researchers have attempted to use phazon to produce weaponry; however, they lack the technological means to do so. Some Adnezians theorize that phazon could be used in the development of nuclear weapons, but such research has not been performed, and has been expressly outlawed by New Mechanicus.
Phazon is treated as a severely radioactive material. Phazon causes severe radiation around it for roughly 30 feet, then lessens its intensity to high radiation for 60 feet beyond that; then moderate for 120 feet beyond that; then light for 240 feet beyond that.
Phazon Radiation PHAZON 30 ft 90 ft 210 ft 350 ft Severe ---------------> High -------------------> Moderate ----------------> Light ---------------------------->