# Decoding Impact DAOs (Part 1) #Web3 The article discusses public goods and their importance in creating positive externalities for individuals who are not party to the transaction. Public goods are typically under-provided by the market due to the free-rider problem, where individuals can benefit from the provision of the good without contributing to its funding. Traditional mechanisms of public goods provision have primarily been owned by nation-states using taxation, but they often suffer from high overheads and rigidity in adapting to the evolving demands of users. The article suggests that blockchain technology can be used to build novel coordination mechanisms that provide a focal point for contributors to create public goods while also rewarding those involved. Impact DAOs, which use blockchain as a "trust anchor," are mentioned as a potential solution to build the public goods of the future. Published for [General Magic](https://paragraph.xyz/@generalmagic/decoding-impact-daos-part-1-%E2%80%94-public-goods-problem)