DAI is set up so that it's not dependent on ETH always going up. People create DAI by locking up ETH (or in the future, other assets) as collateral. Currently for ETH, you have to lock up 150% of the value that you take out in DAI (but you can collateralize higher than that if you like). If the price of ETH falls below a certain value, then a position can be liquidated automatically by the system, to cover the position.

DAI has a goal of adding additional forms of collateral in the future. One could see a coin like DAI being backed by a mix of Gold, real estate, commodities, or securities to achieve greater stability.