DAI is a stablecoin that is pegged to the value of the US dollar. It was created by MakerDAO, which is a decentralized autonomous organization built on the Ethereum blockchain. MakerDAO was founded by Rune Christensen in 2015, and the DAI stablecoin was launched in December 2017.

The idea behind DAI is to create a stable cryptocurrency that can be used for everyday transactions, without the volatility that is often associated with cryptocurrencies like Bitcoin and Ethereum. DAI achieves this stability by using a system of collateralized debt positions (CDPs), which allow users to lock up Ethereum as collateral in exchange for DAI.

When a user locks up Ethereum as collateral in a CDP, they are issued a certain amount of DAI based on the value of the collateral. If the value of the collateral falls below a certain threshold, the CDP is liquidated and the collateral is used to buy back DAI from the market. This ensures that the value of DAI remains pegged to the US dollar.

Since its launch, DAI has become one of the most widely used stablecoins in the cryptocurrency ecosystem. It has been used for a wide range of applications, including trading, payments, and remittances. The MakerDAO community has also continued to innovate, with new features like multi-collateral DAI and the DAI Savings Rate being added to the protocol.