xDai is an Ethereum side-chain that uses the Dai as the native currency instead of ether. Or rather, it uses the xDai token which is pegged to Dai.
All ethereum transactions require ether and this is why ether has any value at all. This is a condundrum because Ethereum users must hold an unstable asset (Ether) to use a stable asset (Dai). Likewise, smart contract developers must work around Ether's fluxuating price. Ether is what might be called dead weight.
xDai is new and not yet available on Metamask but can be added as a custom RPC.