HTTP 402 resurrected after 28 years of dormancy: Can AI Agent Payment Protocol x402 work?

Question

In 1997, a code was embedded in the HTTP protocol: 402, meaning “Payment Required.”

But this status code was never truly used since its inception. The reason is simple—there wasn’t a suitable online payment method at the time, so this feature was shelved for almost thirty years.

Until now.

Stablecoins have matured, L2s have reduced payment costs, AI Agents have suddenly become popular, and the need for micropayments has emerged. A leading exchange seized this opportunity and launched the x402 protocol: when AIs or users access paid content, they can complete on-chain payments directly without registering an account or switching pages.

Sounds simple? In reality, it’s backed by an entire ecosystem being rebuilt from scratch.

Protocol Layer: Teaching AI to “Pay by Itself”

x402 isn’t a single protocol; it’s more like a modular toolkit that solves three things: how AIs communicate, how they pay, and how they establish trust.

The core is the x402 protocol itself. Designed based on the HTTP 402 status code, when an AI accesses a paid API, it automatically receives a payment request and completes an on-chain transfer with stablecoins like USDC. The entire process requires no human intervention.

To enable collaboration between AIs, Google proposed the A2A protocol (Agent-to-Agent), standardizing communication between agents. Anthropic launched the MCP protocol, providing interfaces for AIs to access tools and data. Building on MCP, Google released the AP2 payment protocol, allowing AIs to call services and pay automatically as needed, compatible with both traditional payments and x402.

The key to implementing these protocols is Ethereum’s EIP-3009 extension. It allows token transfers via signed authorization without paying gas fees—solving the problem of “AIs not holding ETH in their wallets.” There’s also the ongoing ERC-8004, establishing on-chain identity and reputation systems for AIs, recording execution history and trust scores.

In short, the x402 protocol layer is building a “language + currency + trust” system for AIs. This is the first step in getting the entire ecosystem up and running.

Infrastructure Layer: Who’s “Paying on Behalf” of AI?

Protocols define the rules, but it’s the infrastructure that makes payments actually work.

First is Cloudflare. As a global cloud platform, it co-initiated the x402 Foundation with a leading exchange and integrated the protocol into its CDN nodes and developer tools. Cloudflare not only provides a global distribution network but also supports a “use first, pay later” delayed payment mechanism, enabling AIs to smoothly access content and complete settlements.

Next is the x402 Facilitator (payment aggregator), responsible for helping AIs complete a series of on-chain processes such as “paying on behalf, settling, and broadcasting.” Users or AIs only need to send an HTTP 402 request, and the Facilitator will pay the gas, bundle the transaction, and broadcast it on-chain. Settlement uses the EIP-3009 standard, allowing one-time authorization for USDC deductions, with no need for AIs to hold tokens or sign manually.

Data shows that a leading exchange is still the largest Facilitator, handling over 1.35 million transactions covering 80,000 buyers. PayAI comes second, active on chains like Solana and Base, with a total transaction volume of $280,000 and a user count surpassing the former. Others like X402rs, Thirdweb, Open X402, etc., are also competing for market share.

In addition to Facilitators, native settlement blockchains purpose-built for x402 are emerging. A representative project is Kite AI, one of the first Layer 1 blockchains to fully embed x402 payment primitives, supported by several top institutions. It doesn’t handle payment verification directly but provides an execution and settlement environment for x402 transactions, allowing agents to automatically initiate, receive, and reconcile on-chain payments via standardized authorization instructions.

On the execution front, Peaq from the DePIN sector also plays a key role. As a public chain focused on the machine economy, Peaq natively supports the x402 protocol, enabling automatic payments and settlement between devices and agents.

In the x402 collaboration layer, Questflow is a representative project where developers can publish agent tasks, set prices, and settle on-chain via x402. Others like AurraCloud and Meridian offer multi-chain settlement and custodial services.

In summary, the x402 infrastructure layer is being built around three questions: how to send requests, how to securely collect payments, and how to quickly deploy across different chains. This determines whether the entire payment system can truly function.

Application Layer: What Products Actually Use x402?

With protocols and infrastructure in place, the application layer needs to get moving.

The current situation: very few projects have launched.

Daydreams: Building an LLM inference platform with x402 payments
Heurist Deep Research: A Web3-native AI research platform where users pay per query in USDC for multi-page research reports
Gloria AI: Uses x402 to enable pay-per-article news
Snack Money API: A micropayment API for X, Farcaster, etc., focusing on identity and social-based small payments and tipping
tip.md: Lets AI assistants help users send crypto tips directly in chat, with USDC tips processed through MCP + x402
Firecrawl: A web crawling and cleaning API that converts sites to LLM-usable data, charging per API call via x402

Overall, the x402 application layer is still exploring. Functional platforms are in their infancy and have yet to reach scale. The race is on to see who can deliver truly usable, monetizable, and reusable products first.

Meme: High Price and Hype Volatility

As x402-related concepts gain traction, a batch of “narrative-riding” native Meme projects quickly emerged in the market.

The most representative is PING, launched on Base chain. On launch day, its market cap quickly surpassed $10 million. Besides PING, other tokens like “PENG” and “x402” have appeared in the community.

These Meme tokens aren’t core to the protocol but do bring attention, hype, and early liquidity.

What Challenges Remain for x402 Adoption?

Despite its eye-catching concept, x402 faces several real-world challenges before true adoption.

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

Second, complex tech stack and high integration costs. x402 involves a new set of protocols, integrating payments, signature transfers, agent communication, and more, making it a high barrier for developers.

Third, compliance risks. With its “no account, no redirect payments” model, efficiency is high but it bypasses traditional payment KYC/AML requirements, which could raise regulatory concerns in some regions.

Fourth, network effects have not yet formed. The core of a payment protocol is ecosystem collaboration, but there are still few services and platforms integrated with x402, and the ecosystem isn’t self-sustaining yet.

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

Where Are the Participation Opportunities?

From a participation perspective, x402’s long-term opportunities lie more in the infrastructure and key platform layout.

First is base chains and infrastructure. x402 relies heavily on Ethereum ecosystem standards like EIP-3009 and ERC-8004, and Base is currently the primary chain for deployment, with a strong stablecoin loop and developer-friendly environment, likely to incubate leading products first. Solana also has advantages in high-frequency payments, suitable for agent microtransaction scenarios.

Next are native settlement blockchains like Kite AI, and payment aggregators and service platforms such as PayAI, Meridian, and AurraCloud. They handle payment verification, gas fees, API integration, and, once they become general gateways, their value will grow rapidly.

As for tokens, caution is advised. Currently, x402-related tokens are small and volatile, with many Meme coins still stuck at the narrative stage. Projects with real payment adoption or platform utility are worth more attention.

What Do Leading Builders Think?

Amid diverse market opinions, the perspectives of leading builders and KOLs on the x402 ecosystem are also worth noting.

Some analysts point out that the current x402 boom is mostly driven by Meme speculation, but the real “main course”—technological implementation and ecosystem formation—has yet to begin. Only through market selection will quality projects emerge. Treating x402 as a short-term speculation misses the logic and rhythm of the entire track.

Others, from a historical perspective, note that micropayments are not a new concept. From early Bitcoin, Lightning Network, Nano, IOTA, to BSV, the crypto space has repeatedly tried to push small-scale transactions but has never achieved large-scale adoption. What’s different with x402 is that, for the first time, it has found the true subject in need of micropayments: AI Agents, not human users.

Some take an even broader view, pointing out that the bigger potential behind x402 is as the payment infrastructure for the “machine economy.” From on-chain knowledge collaboration and API economy to AI-driven DAO governance, all these M2M (machine-to-machine) transaction needs naturally require a frictionless, accountless, and automatically executable payment layer.

From an architectural perspective, some believe that Facilitators, as the key layer for payment verification and execution, are becoming the most critical infrastructure in the sector. Projects like PayAI, the leading exchange, and Pieverse already show clear competitive dynamics.

Finally, some raise a long-term question: Can agents really “hold and pay with tokens”? This involves key mechanisms like private key custody and permission management.

In summary, while x402’s hype may fluctuate in the short term, long-termists see it as just entering its real construction phase.