Your concerns about network trust are entirely unwarranted. In the bitcoin whitepaper published over ten years ago, before the software was even written, Satoshi explains how a trustless network might be created via Proof of Work.
On the topic of price fluctuations, I'd like to point out that not only are there a plurality of stablecoins pegged against and collateralized with dollars, there are also synthetic assets like DAI which follow in Satoshi's footsteps - using game theory, economics, and finance, to novel and practical effect.
I highly recommend reading the Bitcoin, Ethereum, and DAI whitepapers (in that order).
For Bitcoins, concerns about trust are warranted. Currency requires trust that it retains value; that is not given for Bitcoin and its countless clones at all.
Stablecoins collateralised by actual dollars quite obviously require trust, namely in the entity providing and holding the collateral.
Stablecoins collateralised by "the algorithm" have never been seriously tested, in my opinion, and it not clear to me at all whether you can manufacture stability algorithmically. DAI, SAI, MAI, whatever, are only collateralised by "assets" on the Ethereum blockchain, so ultimately self-referential (or, if collateralised by something tied to something real, require trust there.)
The fourth word on Tether's wikipedia page is "controversial". Nobody is under the impression that it's fully collateralized. Would you care to make the case that a different, trusted stablecoin isn't fully collateralized?
DAI specifically is collateralized with ETH using smart contracts - it's over 100% collateralization is incontrovertible.
Sure, it's collateralized by ethereum - the problem with that of course is that ethereum is a completely manipulated price driven up by billions in falsely collateralized tether.
So effectively, you've linked DAI to the value of a coin that is set by tether. That being the case, the actual value of the collateral is in question.
On the topic of price fluctuations, I'd like to point out that not only are there a plurality of stablecoins pegged against and collateralized with dollars, there are also synthetic assets like DAI which follow in Satoshi's footsteps - using game theory, economics, and finance, to novel and practical effect.
I highly recommend reading the Bitcoin, Ethereum, and DAI whitepapers (in that order).
https://bitcoin.org/bitcoin.pdf
https://ethereum.org/en/whitepaper/
https://makerdao.com/en/whitepaper/