The 30-year dormant HTTP 402 is awakened: Can the AI payment protocol x402 reinvent on-chain transactions?

A forgotten button suddenly finds its purpose

In 1997, the creators of the HTTP protocol left behind a status code: 402 Payment Required. Its meaning was straightforward—“Want to see content? Pay first.” But at that time, no one knew how to implement it, so this code became a tool locked away in a drawer, unused for nearly thirty years.

The turning point came in 2025. Stablecoins matured, Layer2 reduced on-chain transfer costs to acceptable levels, and more importantly—AI Agents exploded in popularity. These intelligent agents require frequent API calls, data retrieval, and computational resource purchases. The traditional “register account—bind card—pay” process is simply not feasible for them.

Coinbase saw the opportunity and took the HTTP 402 “antique code,” repackaging it into the x402 protocol. The core logic is simple: when an AI accesses a paid resource, the server returns a 402 status code; the AI wallet automatically completes an on-chain USDC transfer. The entire process involves no human intervention, not even a page jump.

Is this just a small upgrade to “automatic payment”? In fact, it’s part of a whole new payment system being rebuilt. From low-level protocols to settlement networks, and to real-world applications, x402 is trying to answer a fundamental question: how should machine-to-machine economic activities be settled?

Protocol Layer: Teaching AI to “pay on its own”

x402 isn’t a standalone standard; it’s more like a combination of tools addressing three core issues: how AI communicates, how it pays, and how it proves its reliability.

At the bottom is x402 protocol itself, based on the design of HTTP 402. When AI accesses paid content, the server responds with a payment request, and the AI uses stablecoins like USDC to directly complete an on-chain transfer. The entire process requires no registration, no redirection to third-party payment pages.

To enable different AIs to cooperate, Google proposed the A2A protocol (Agent-to-Agent), standardizing how agents hand off tasks and collaborate. Anthropic also launched the MCP protocol, providing AI with access tools and data interfaces. Building on MCP, Google developed the AP2 payment protocol, allowing AI to call services on demand and pay automatically, compatible with traditional payments and x402.

The key to these protocols’ deployment is Ethereum’s EIP-3009 extension. It allows users to authorize token transfers via signatures without paying Gas—solving the problem of “AI wallets without ETH to pay Gas.” Complementing this standard is the ongoing ERC-8004, which establishes on-chain identities and credit systems for AI Agents, recording execution history and trust scores to help service providers assess reliability.

In essence, the x402 protocol layer is building a “language + currency + trust” system for AI services, enabling machines to transact, collaborate, and pay without supervision.

Infrastructure: Who helps AI “run errands and pay”?

Protocols define rules, but the real enablers are the infrastructure layers handling the dirty work.

First is Cloudflare. It co-founded the x402 Foundation with Coinbase and integrated the protocol into its CDN nodes and developer tools. Cloudflare offers more than a global distribution network; it supports a “resource-first, delayed settlement” mechanism—AI can access content first, then settle payments collectively later.

Next is x402 Facilitator, a payment aggregator. It helps AI agents complete the entire on-chain process of “payment on behalf—settlement—broadcast.” Users or AIs just send an HTTP 402 request; the Facilitator handles Gas payments, transaction bundling, and broadcasting. Settlement uses EIP-3009, with one-time USDC authorization, so AI doesn’t need to hold tokens or manually sign.

Data shows Coinbase remains the largest Facilitator, processing over 1.35 million transactions across 80,000 buyers. PayAI ranks second, mainly active on Solana and Base chains, with a total transaction volume of $280,000 and even more users than Coinbase. Other players like X402rs, Thirdweb, Open X402 are also competing.

In addition, a native settlement blockchain designed specifically for x402 has emerged. The leading project is Kite AI—the first Layer1 blockchain to embed x402 payment primitives directly into its core. Backed by Coinbase Ventures, PayPal Ventures, and others, it doesn’t handle payment verification directly but provides execution and settlement environments supporting agents to initiate, receive, and reconcile on-chain payments via standardized authorization commands.

On the execution side, Peaq, a public chain focused on machine economy, plays a key role in the DePIN field. It natively supports the x402 protocol, enabling devices and agents to automatically perform payments and settlements.

The collaboration layer is represented by Questflow, where developers can publish agent tasks, set prices, and settle on-chain directly via x402. It has partnerships with platforms like Virtuals and Gate. Additionally, AurraCloud and Meridian offer multi-chain settlement and custody services for x402.

In summary: the infrastructure layer of x402 revolves around three issues—how to send requests, how to securely receive payments, and how to quickly deploy across different chains. These determine whether the entire payment system can truly operate.

Application Layer: Who is really using x402?

Once protocols and infrastructure are in place, the key is whether the application layer is active. Currently, few projects have actual deployments.

• Daydreams: building an LLM inference platform that uses x402 for payments.
• Heurist Deep Research: a Web3-native AI research platform where users pay with USDC per query, automatically generating multi-page research reports.
• Gloria AI: implementing pay-per-article news using x402.
• Snack Money API: micro-payment interface for platforms like X and Farcaster, focusing on identity and social tipping.
• tip.md: enabling AI assistants to perform crypto tips directly in chat interfaces, with USDC tips flowing through MCP + x402.
• Firecrawl: web crawling and data cleaning API that converts websites into data usable by LLMs, with pay-per-call via x402.

Overall, the application layer of x402 is still in the exploratory stage. Functional platforms are just emerging, without scale effects. It depends on who can develop truly usable, payable, and reusable products.

Meme frenzy: prices and popularity are rollercoastering

As the x402 concept gains attention, a wave of native Meme projects has emerged to ride the hype. The most notable is PING on Base chain, which surpassed $10 million market cap on launch day. Other tokens like PENG, “x402,” and similar memes have also appeared.

While these Meme tokens don’t form the core of the protocol, they boost visibility, hype, and early liquidity.

Challenges on the road to deployment

Despite the hype, real-world adoption faces several hurdles:

First, lack of truly usable products. Most projects are still in testnets or proof-of-concept stages, with rough user experiences.

Second, complex tech stack and high integration costs. x402 involves new protocols, integrating payments, signatures, agent communication, which raises the development barrier.

Third, regulatory risks. The “no account, no redirect” approach improves efficiency but bypasses traditional KYC/AML systems, potentially risking regulatory issues in some regions.

Fourth, network effects are not yet formed. The core of payment protocols is ecosystem collaboration, but few services or platforms have adopted x402, so the ecosystem remains nascent.

In summary: x402 still has a long way to go before large-scale use. From technology to real-world deployment, multiple barriers need to be overcome.

Where are the participation opportunities?

From an investment perspective, the long-term opportunities for x402 lie mainly in infrastructure and key platforms.

First, core chains and infrastructure. x402 relies on Ethereum standards like EIP-3009 and ERC-8004. Base is currently the main deployment chain—its stablecoin ecosystem and developer-friendly environment make it promising for early leading products. Solana also has advantages in high-frequency payments, suitable for Agent microtransactions.

Second, native settlement blockchain Kite AI and payment aggregator platforms like PayAI, Meridian, AurraCloud. They handle payment verification, Gas payments, and API integrations. Once these become universal entry points, their value will rapidly grow.

Regarding tokens, caution is advised. Currently, x402-related tokens are small and volatile; many Meme tokens are still narrative-driven. Projects with real payment or platform utility are more worth watching.

What do top builders and KOLs think?

In the current market, many leading builders and KOLs have expressed their views on the x402 ecosystem.

Haotian notes that the current hype is mostly driven by Meme speculation; the real “main course”—technological implementation and ecosystem formation—is still in early stages. Only through market filtering will quality projects emerge. He warns that those treating x402 as short-term speculation misunderstand the entire track’s logic and rhythm.

Laobai from a historical perspective points out that micro-payments are not a new concept. From early Bitcoin and Lightning Network to Nano, IOTA, BSV, many attempts have been made to promote small transactions, but large-scale adoption remains elusive. What’s different with x402 is that it targets the actual “subjects” who need micro-payments: AI Agents, not human users.

Danny takes a higher-level view, emphasizing that the bigger potential behind x402 is the payment infrastructure for the “machine economy.” From on-chain knowledge collaboration, API economy, to AI-driven DAO governance, all these M2M (machine-to-machine) transactions inherently require a frictionless, accountless, automatically executable payment layer.

Blue Fox Notes sees the Facilitator as a key infrastructure component—becoming one of the most critical foundational layers in the field. Projects like PayAI, Coinbase, Pieverse are already forming a clear competitive landscape.

Finally, Zhixiong Pan raises a long-term question: can Agents truly “hold tokens and pay”? This involves key mechanisms like private key custody and permission management.

In summary: while x402’s hype may fluctuate, long-term believers see it just entering a phase of real construction.