There are many potential applications for Decentralized Autonomous Organisations (DAO) in business and possibly in politics and civil administration as well. If a solution not requiring trust exists for an organisational problem it is worth exploring because the possibility of fraud will be negligible. Human politicians are notoriously untrustworthy. It would seem far superior to have laws written by software in the form of smart contracts resulting from machine-to-machine negotiations with each citizen equally represented by an AI agent. The goals of said agents could be set by the citizens themselves. There should be a strict hierarchy of laws with the constitution setting clear limits to any other laws passed.
If a law were a smart contract then there would be no separation of powers between legislative, executive, and judicial branches of government for that law. Would that be a problem? To what extent could laws be written as smart contracts or automatic limitations to smart contracts?
I don't really know any technicalities of law-making, but the blockchain and smart contracts technology are paving the way towards a direct-democracy... We really need to get rid of the corrupt representative-democracy (party politics)
Direct democracy is not without problems. It would be impossible for the public to decide about the myriads of details of all practical matters in all branches of government. Referendums are problematic, too, because choosing the issue to have a referendum about and the exact framing of the questions are of vital importance. I think the most feasible form of direct democracy in the future is one where the citizenry collectively defines broad political goals and preferences while leaving the negotiation process and the implementation details to AI systems.