It is not entirely clear whether the Dao is the material source of all things, or just a principle of unity. The concept of Dao is not really clearly explained in the Daodejing.
The Daodejing says that reality is like “a block of unpolished wood”: that is, it is not refined, but just something that is simply a part of ordinary life, but also profound in meaning.
The Daodejing also introduces the concept of “wu,” which means non-existence. It exists in perpetual relation to “you,” or existence. Wu is somewhat mysterious and metaphysical.