x402 protocol ecosystem panorama: from the dusty HTTP code to the AI payment revolution

A Button Forgotten for 28 Years

In 1997, when the HTTP protocol defined the status code 402, it was named “Payment Required”.

And then? There was no then. Because at that time there was no viable online payment method, this code was left untouched for nearly thirty years.

But now the situation has changed. Stablecoins have matured, L2 has reduced transaction fees, and more importantly—AI Agents are starting to need to spend their own money.

So a leading trading platform picked up this dusty button and created the x402 protocol: allowing AI to access paid content without registration, without jumping pages, and directly completing on-chain transfers. It sounds simple, but behind it is a whole set of reconstructing payment ecosystem.

The question is, apart from trading Memes, can this system really operate?

Protocol Layer: Teaching AI How to Spend Money

x402 is not a standard of solo play, but a puzzle piece.

The core puzzle is the x402 protocol itself—designed based on HTTP 402, AI automatically receives payment requests when accessing paid APIs, completing transfers using stablecoins like USDC. The entire process is seamlessly connected, requiring no human intervention.

But how do AIs communicate with each other? Google proposed the A2A protocol, which standardizes communication and task handover between agents. On the Anthropic side, they developed the MCP protocol, which provides AIs with interfaces for accessing tools and data. Google then built on the MCP to launch the AP2 payment protocol, allowing AIs to request services on demand and make automatic payments, compatible with traditional payments and x402.

These protocols can be implemented, and the key relies on Ethereum's EIP-3009 extension. It allows token transfers to be authorized through signatures without the need to pay Gas fees—solving the awkward problem of “no ETH in AI wallets.”

Also in progress is ERC-8004, which establishes an on-chain identity and reputation system for AI Agents, recording execution history and trust scores. Service providers can determine the reliability of a particular agent based on this.

In simple terms, the protocol layer is building a dedicated “language + currency + trust” system for AI. This is the premise for whether the entire ecosystem can operate.

Infrastructure: Who is helping AI run errands and pay?

The agreement defines the rules, but it is the infrastructure that truly makes the payments run.

Cloudflare is a top-tier player. As a global cloud platform, it co-founded the x402 Foundation with a certain exchange, integrating the protocol into CDN nodes and development tools. It not only provides a distribution network but also supports a “pay-as-you-go” deferred settlement mechanism.

Next is x402 Facilitator - a payment aggregator. They are responsible for helping AI complete the entire on-chain process of “payment, settlement, broadcasting.” Users or AI only need to send an HTTP 402 request, and the Facilitator will pay the Gas, package the transaction, and complete the on-chain broadcasting. Utilizing the EIP-3009 standard, it allows for one-time authorization of USDC deductions, so AI does not need to hold tokens or manually sign.

Looking at the data, a certain leading trading platform remains the largest facilitator, processing over 1.35 million transactions and covering 80,000 buyers. PayAI ranks second, being very active on Solana and Base, with a cumulative trading volume of $280,000, and the number of users even surpasses the leader. Others like X402rs, Thirdweb, and Open X402 are also competing for the market.

In addition to the Facilitator, a native settlement chain specifically built for x402 has emerged. A representative project is Kite AI—one of the first Layer 1s to fully embed x402 payment primitives at the base layer, securing investment from a payment giant's venture capital. It does not directly handle payment verification but provides an execution and settlement environment that supports agents to automatically initiate, receive, and reconcile on-chain payments through standardized instructions.

In the DePIN field, Peaq is also playing a key role. It is a public chain focused on the machine economy and has natively supported x402, allowing devices to automatically complete payments and settlements between devices and agents.

The collaboration layer includes Questflow, where developers can publish proxy tasks and set prices, completing on-chain settlement directly through x402. Additionally, AurraCloud and Meridian provide multi-chain settlement and custody services.

In summary, the infrastructure layer answers three questions: how to send out requests, how to securely receive payments, and how to quickly land on different chains. If these three questions are not answered well, the entire payment system is just a castle in the air.

Application Layer: Who is actually using it?

The protocols and infrastructure are set up, but we need to see if the application layer has been activated.

The reality is that there are very few implemented projects.

Daydreams is building an LLM inference platform powered by x402 payments. Heurist Deep Research is creating a Web3-native AI research platform where users pay for queries in USDC, automatically generating multi-page research reports. Gloria AI leverages x402 to enable pay-per-use news.

Snack Money API is designed for micro-payment interfaces like X and Farcaster, focusing on small rewards around identity and social interactions. tip.md allows AI assistants to directly help users complete crypto tipping in the chat interface, with USDC tips going through the complete payment process via MCP+x402.

Firecrawl provides web scraping and cleaning APIs, converting websites into data usable by LLMs, with pay-per-call through x402.

Overall, the application layer is still in the exploratory stage. Functional platforms are just starting out and have not formed a scale effect. It depends on who can first create a product that is truly usable, payable, and reusable.

Meme Speculation and Price Volatility

With the rising popularity of the x402 concept, the market quickly saw a batch of “narrative-surfing” native Meme projects.

The most representative is PING on the Base chain, which broke ten million dollars in market value on the day it was launched. In addition, the community has also seen the emergence of tokens such as “PENG” and “x402”.

These Meme tokens do not currently constitute the core of the protocol but can provide attention, popularity, and early liquidity.

What other obstacles are there to landing?

The concept of x402 is eye-catching, but there are many issues to be addressed when it comes to implementation.

First, there is a lack of truly usable products. Most projects are still in testnet or proof-of-concept stages, and the user experience is rough.

Second, the technology stack is complex and integration costs are high. x402 involves a new protocol that integrates multiple modules such as payment, signature transfer, and proxy communication, making the entry barrier for developers quite high.

Thirdly, compliance risk. The focus on “no accounts, no redirect payments” offers high efficiency but bypasses the KYC/AML requirements of traditional payment systems, which may pose regulatory concerns in certain regions.

Fourth, the network effect has not formed. The core of the payment protocol lies in ecological collaboration, but currently there are not many services and platforms accessing x402, and the ecosystem has not yet formed a self-circulation.

There are still several hurdles to overcome from technology to real-world application.

Where are the participation opportunities?

From the perspective of participation, the long-term opportunities for x402 lie more in the layout of infrastructure and key platforms.

First is the basic chain and infrastructure. x402 primarily relies on Ethereum ecological standards such as EIP-3009 and ERC-8004, while Base is currently the main landing chain - it has a strong stablecoin closed loop and a developer-friendly environment, with the potential to incubate leading products first. Solana also has advantages in high-frequency payments, suitable for Agent micro-transaction scenarios.

The second is native settlement blockchain Kite AI, as well as payment aggregators and service platforms such as PayAI, Meridian, and AurraCloud. They are responsible for verifying payments, bearing Gas, and connecting APIs. Once a universal entry point is formed, the value will rapidly amplify.

As for tokens, it is best to be cautious. Currently, x402 related tokens have a small market size and high volatility, and many Meme coins are still in the narrative-driven stage. Projects that truly have payment implementation or platform usage value are more worth paying attention to.

What do the big shots in the circle think?

In the current situation where market voices are diversified, some insights from Builders and KOLs are worth considering.

Haotian pointed out that the current x402 craze is mostly driven by Meme speculation, and the real technological implementation and ecosystem development have yet to begin. Only through market selection will high-quality projects emerge. He believes that those who see x402 as a short-term speculation have misunderstood the logic and rhythm of the entire track.

Laobai points out from a historical perspective that micro-payment is not a new concept. From the early Bitcoin and Lightning Network to Nano, IOTA, and BSV, the cryptocurrency community has attempted multiple times to promote small transaction applications, but it has always been difficult to implement them on a large scale. The difference with x402 is that it has identified the true “subject” that needs micro-payments for the first time: AI Agents, rather than human users.

Danny raised the perspective higher, pointing out that the greater potential behind x402 is the payment infrastructure of the “machine economy.” From on-chain knowledge collaboration, API economy to AI-driven DAO governance, all M2M (machine-to-machine) transaction demands inherently require a frictionless, account-free, and automatically executable payment layer.

Blue Fox Notes starts from the architectural layer, believing that the Facilitator, as a key link in payment verification and execution, is becoming one of the most core infrastructures in the track. Projects like PayAI, a certain exchange, and Pieverse have already formed a clear competitive landscape.

Zhixiong Pan raises a long-term perspective question: Can an Agent truly “hold and pay with currency”? This involves key mechanisms such as private key custody and permission management.

In summary, x402 may currently experience some fluctuations in popularity, but in the eyes of long-termists, it has just entered a true construction phase.