How does DAI keep its value?

DAI, as a stablecoin, aims to maintain a stable value, typically pegged to the US dollar. But how does it actually accomplish this? The mechanics behind it are intriguing. Is it backed by a reserve of assets? Does it rely on algorithms to adjust supply and demand? Or is there some other innovative approach at play? Understanding DAI's value retention mechanism is crucial for those navigating the cryptocurrency landscape. It's not just about the technology; it's also about trust and transparency. So, could you elaborate on how DAI manages to keep its value consistent? I'm curious to know the details behind this fascinating concept.