x402 Upgrade Variable Pricing: AI agents charge for LLM inference and computations based on usage

Coinbase’s developer platform announced an upgrade to the x402 protocol, launching the “Upto” plan to enable a variable pricing mechanism for AI agents’ computation requests, replacing the previous model in which all requests used a fixed fee. The new plan supports variable-cost services such as large language model (LLM) inference, computation calculations, and data lookups. Implemented on the Ethereum Virtual Machine (EVM), it is compatible with all ERC20 tokens.

The structural limitations of fixed fees: What problem does the Upto plan solve?

Under the x402 protocol’s architecture prior to this, all API calls were charged a fixed fee regardless of the complexity of the request. Coinbase’s developer platform said that fixed pricing works well for API services where outcomes are deterministic, but it “has hindered the development of an entire class of services”—especially those where costs depend on usage, including LLM inference billed by the number of generated tokens, compute calculations billed by runtime, and data lookups billed by query complexity.

In the past, users couldn’t know the actual cost of having an agent complete a task before initiating it, resulting in paying complex-task fees for simple tasks. The design logic of the Upto plan is that the seller sets the maximum acceptable price, the buyer authorizes payment up to no more than a specified upper limit, and the server side charges only based on the actual cost of completing the task. The final amount paid does not exceed the authorized upper limit, and it may be lower than the set maximum price.

Core technical features of the Upto plan

EVM-compatible: Supports settlement for payment using all ERC20 tokens

Completely no Gas fees: Achieves a gasless on-chain payment experience through the CDP Facilitator

Dynamic pricing cap: The seller sets the maximum amount; the server settles based on actual usage without charging extra

Expanded use cases: Covers variable-cost service types such as LLM inference, compute rental, and data lookups

x402’s ecosystem landscape: Linux Foundation taking over and current adoption rates

Developed by the x402 protocol’s team at Coinbase, ownership was transferred to the non-profit Linux Foundation earlier this month. Google (Google), Microsoft (Microsoft), and Amazon Web Services (AWS) have already held shares in the x402 protocol through the x402 Foundation. The participation of the three tech giants indicates strong mainstream tech recognition of AI agent payment infrastructure.

However, adoption data shows a downtrend after reaching a peak. According to data from Dune Analytics, the x402 network hit a transaction-volume peak between November 4 and 10, 2025, recording 13.7 million transactions in that single week. After that, it continued to decline. In early January 2026, the weekly transaction volume fell below 1 million. As of the last week of March, it had dropped to 112,708 transactions, for a cumulative decline of more than 99%.

Whether this Upto upgrade can effectively boost network activity and inject new growth momentum into AI agent commerce still needs to be verified by subsequent data.

FAQ

How does the Upto plan prevent users from being overcharged?

Upto uses a “set a cap, settle based on actual usage” mechanism: the buyer authorizes the maximum payment amount, the server side charges based on the actual cost required to complete the task, the user’s final spend does not exceed the authorized upper limit, and they may pay an amount lower than the set maximum price—effectively eliminating the overpayment problem under a fixed-fee model.

What does it mean that Google, Microsoft, and AWS hold shares in x402?

The three tech companies hold shares in the protocol through the x402 Foundation, which represents a strategic endorsement from mainstream tech for AI agent payment infrastructure. This structure also means that x402’s development direction will be influenced by the participation of multiple stakeholders, rather than being led by a single organization.

Why did x402’s weekly transaction volume fall from 13.7 million to 112,708?

According to Dune Analytics data, after hitting its November 2025 peak, x402 continued to decline. The official has not provided a specific explanation for the magnitude of the drop. Analysts believe that the high activity level in the early testing phase dropped after the initial novelty wore off—an adoption-cycle characteristic commonly seen in emerging protocol networks.