Look if you understand how a transaction gets confirmed by a node and how that node places it inside a block and how that block gets synced into blockchain by the network's implicit consensus... I don't know how you have anything other than admiration for Bitcoin.

I mean, it's not excatly fair comparing peak to bottom. Bottom to peak for Bitcoin's market cap is about 570.53B. That is not a fail. Also, you notice those changes as you measure value in fiat. According to chatGPT "The peak for the Euro to US Dollar exchange rate (EUR/USD) occurred on July 15, 2008, when the rate reached 1.6038". This year EUR fell below USD. Do you think 40% fall of EUR makes it a fail?

DAI is a way to make a stable currency from non-stable currencies. If you think that cryptocurrencies have no value, I'm not going to be able to change your mind on anything else. It's an exodus of an opinion, so let's discuss it. We give value to things from which we can benefit. Does the abstract nature of those things really reduce their beneficial nature. For example, the internet is very abstract and many people don't even know how to imagine it, they'd believe it was a black box with a red button at the top. But by now, everyone recognizes value of the internet. It's the same with cryptocurrency. It gives you an ability to control your own finance, lets you participate in decentralized financial systems and simplifies payments that do not need to be as complex as banks make them out to be (I have a bachelors in Financial Mathematics and still don't understand why banks do what they do... because we're not meant to).

So, the fact is crypto has value because (many) people find value in it. The problems that you stated can reduce the value, but solutions are evergrowing. DAI is built from, in one aspect, lesser coins, but producing a better one.

The value of the dollars in your cookie jar is determined by a centralized entity that has a right to print your very phisical money at will and take as much value from it as they want. That makes me uneasy... far more than Bitcoin's price changes.

Rarity is a carrier of value because it keeps inflation at bay. If dirt was valuable, inflation would go through the roof.

You can buy a pack of gum with it (if you're comfortable with Algorand's 0.001$ transaction fee).

Also about smart contracts. Yes, DAI (a stablecoin) price going up causes turmoil on the network. But the smart contracts that implement it make it very profitable for users to abuse their protocol and thus get the price back to the value of $.