x402: From HTTP 402 to Encryption Native Payment Standards, The Value Exchange Layer in the AI Agent Era

Background of x402 Hot Topic: The AI Economy Without Payments

The rapid development of the AI industry has driven the rise of the agent concept, but most AI agents still cannot perform autonomous economic activities. They can generate content, call models, execute tasks, but cannot pay for their own services or data calls. The existing payment systems rely on account systems and credit institutions, which AI cannot meet, due to prerequisites like KYC, API key management, and account binding. This flaw results in an incomplete AI economy.

After Google launched the Agent Payments Protocol (AP2), focused on AI payment solutions, Coinbase’s previously released x402 protocol also entered the public eye, attempting to provide a more blockchain-native underlying solution to this issue. x402 is based on the long-reserved but never widely adopted HTTP status code “402 Payment Required,” embedding payment logic into the HTTP request/response flow, enabling any API or agent to complete value exchange instantly during access. Essentially, it is a native internet payment standard, not a traditional application interface.

Both AP2 and x402 aim to enable automated payments for AI, with the former focusing on building a centralized API payment standard relying on platform accounts, while the latter emphasizes decentralization, embedding encrypted payments into HTTP protocols for real-time, cross-chain settlement without accounts.

x402 Protocol Design: Making Encrypted Payments a Native Internet Functionality

x402 is an open payment standard based on the native HTTP status code 402 Payment Required. Its core goal is:

“Allow any AI, API, or IoT device to perform real-time, per-use value exchange at minimal cost.”

Technically, x402 embeds “payment” into the HTTP protocol stack—developers only need a line of code:

paymentMiddleware(amount: “0.10”, address: “0x…”) to enable AI call-and-pay capabilities.

Compared to traditional payment solutions (such as bank cards, Stripe, PayPal, or OpenAI’s prepaid points system), x402’s structure is closer to internet core standards.

This design offers three major features:

• Accountless: Payers and service providers interact via blockchain addresses, without traditional accounts.

• Instant Settlement: Payments and access are nearly synchronized, with some Layer 2 networks achieving “≤ 2 seconds” payment times.

• Support for Micro-Payments: Capable of supporting transactions as low as $0.0001, suitable for high-frequency small-scale scenarios like content, data, and API calls.

Additionally, the protocol chain and tokens are neutral; currently, stablecoins (such as USDC on Base) are used for settlement, with future expansion to multi-chain solutions.

x402 Application Prospects: From Per-Use Billing to Value Networks in the Machine Economy

The greatest significance of x402 lies in enabling “machines/agents” to have economic interaction capabilities, not just function calls. Its application directions include:

• Per-Call Billing (Pay-per-Use): AI models, data APIs, and computing power access can be billed per call, without subscriptions.

• Autonomous Payment by Agents: Agents can freely call services and pay without manual pre-charging or account management.

• Micro-Payments for Content and Data: Payment per article, per second, or per data volume becomes possible, breaking through traditional advertising/subscription models.

• Machine-to-Machine (M2M) Payments: IoT devices and automation systems can perform spontaneous value exchange via x402.

From an industry perspective, as the AI agent economy rises, such protocols provide a new “value layer” infrastructure.

The application space of x402 is not limited to payments. Its core value is enabling machines to have economic interaction capabilities.

x402 Development Trends and Practical Challenges

x402 is still in the early promotion stage. Coinbase, through many partnerships and the popular Ethereum Layer 2 Base network and USDC stablecoin ecosystem, is pushing it to become the native AI payment standard. If widely adopted by developers, x402 could become the “TCP/IP of the AI economy,” serving as the value transfer protocol for all agent and API layer interactions.

However, challenges are also evident. Regulatory and cross-border compliance issues for stablecoins are not fully clarified; HTTP 402 as a network layer standard still requires broad adoption by mainstream developers and platforms; on-chain micro-payments also need further optimization in performance and cost. Overall, these issues are more transitional obstacles during the early infrastructure adoption phase rather than fundamental barriers. Currently, x402 remains mainly in proof-of-concept and developer testing stages, with no urgent application scenarios, and it will take time before large-scale commercialization.

x402 Ecosystem Layout and Investment Perspective

• Ecosystem Builders:

The long-term development of x402 depends on ecosystem construction and investment collaboration. Focus areas include three main directions:

Ecosystem Layer: Mainly Coinbase and Circle, which are core drivers for standardization and industry implementation. Coinbase handles protocol development and ecosystem integration, while Circle provides circulation assets and compliant stablecoins, jointly building the operational foundation of x402.

Public Chain Infrastructure Layer: Currently supported by only Base Chain and Solana. The former, as Coinbase’s core ecosystem network, natively supports USDC settlement; the latter offers high performance and low cost, providing potential expansion space for AI payments and microtransactions.

Product Application Layer: Comprising facilitators, wallets, and marketplaces, forming the service and interaction hub of x402. Facilitators handle payment matching and settlement for more efficient fund flow; wallets manage signatures and payment execution, serving as user and AI agent identity entry points; marketplaces aggregate callable services and resources, enabling agents to autonomously discover and pay for access, ultimately forming a complete application loop.

• Related Concept Tokens:

Based on Binance Alpha’s delisting of Solana Memecoin, it’s speculated that Binance will continue to support projects on BNB Chain exclusively, while Coinbase’s listing pace is expected to remain cautious. Looking back at last year’s rise of Solana AI agent concepts, projects that aim to gain CEX attention typically need to reach about $100 million market cap early on through DEX trading alone to be considered for listing or active promotion.

Investors interested in the x402 track should monitor protocol adoption rates, trading volume rise, ecosystem project implementation, and regulatory policy changes.