What is DAI backed by?

Could you please explain to me what DAI is backed by? I've heard about this cryptocurrency but I'm not entirely clear on its underlying mechanism. Is it similar to other stablecoins where it's pegged to a fiat currency? Or does it have a unique collateralization system? I'm particularly interested in understanding how its value is maintained and whether it's backed by any physical assets. Could you elaborate on these points and give me a clearer picture of DAI's backing?