Dai is a stablecoin cryptocurrency that was created by MakerDAO, a decentralized autonomous organization (DAO) built on the Ethereum blockchain. Stablecoins are cryptocurrencies designed to have a stable value by pegging their price to an underlying asset or reserve.

Dai is specifically designed to maintain a value of approximately $1 USD. It achieves this stability through a system of smart contracts and collateralization. Users can generate Dai by locking up their Ethereum (ETH) or other approved digital assets as collateral in a smart contract called a Collateralized Debt Position (CDP). The locked-up assets provide the necessary backing for the Dai supply.

The MakerDAO system ensures the stability of Dai through a series of mechanisms. When the value of Dai begins to deviate from its target price, the system automatically adjusts the interest rates and fees associated with CDPs to incentivize users to either generate more Dai or repay their existing Dai debt. This mechanism helps bring the price of Dai back to its intended value.

Dai is decentralized and operates autonomously, meaning that its governance is determined by token holders who participate in the MakerDAO ecosystem. These token holders can vote on proposals and changes to the protocol, allowing for community-driven decision-making.

Dai has gained popularity as a stablecoin option within the cryptocurrency ecosystem. It provides stability and can be used as a medium of exchange, a store of value, or as collateral for other transactions within the decentralized finance (DeFi) space. It has been used in various applications such as lending, trading, and remittances.

It's important to note that the information provided here is based on the knowledge available up until September 2021, and there may have been updates or changes to the Dai system since then. It's always a good idea to consult the latest sources and official documentation for the most up-to-date information.