A dormant HTTP status code for 27 years is now leveraging the fusion of AI and crypto technology to spark a fundamental transformation in the internet payment layer.
The x402 protocol, seven days after igniting market enthusiasm, did not fade away as many had expected. As of October 27, 2025, the total market capitalization of all x402 ecosystem tokens surpassed $800 million, with a 24-hour increase of 361% and trading volume remaining at a high level.
This protocol was launched by Coinbase in May 2025, aiming to activate the nearly thirty-year dormant HTTP 402 status code (“Payment Required”) and build a frictionless, low-cost on-chain payment layer for AI agents.
I. Protocol Overview and Data Performance
The core innovation of the x402 protocol lies in embedding blockchain payment processes into standard HTTP requests, enabling AI agents and users to complete payments as seamlessly as browsing the web.
● On-chain data shows astonishing growth for the x402 protocol. In the past 30 days, the number of protocol transactions increased by 35,000% to over 1 million, and the number of buyers grew by 244,000% to over 68,000. In the last 24 hours, there were 424.85 thousand transactions, with a transaction volume close to $483.87 thousand and more than 25.61 thousand unique buyers.
● The protocol cleverly abstracts complex blockchain interactions, resulting in a simple and efficient workflow:
1. Client Request: The AI agent initiates an access request to a protected resource (such as an API endpoint).
2. 402 Response: The server returns a “402 Payment Required” status code and specifies the required fee in the JSON payload.
3. Signature Retry: The client uses a wallet to sign the payment authorization and attaches the signature in the request header to retry the request.
4. Verification and Access: The “Facilitator” service verifies the signature and settles the payment on-chain, after which the server grants access to the resource.
II. Ecosystem Evolution: From MEME to Value Support
The x402 ecosystem is undergoing a silent value shift, migrating from pure MEME speculation to application projects with real support.
Overview of Representative Ecosystem Projects
Project Name | Market Cap (Approx.) | Positioning | Key Developments |
PayAI | $60.6M | x402 Payment Infrastructure (Facilitator) | Processes over 14% of x402 transactions, becoming the largest Facilitator outside Coinbase |
PING | $34-41M | The first MEME token issued via the x402 protocol | Market cap once exceeded $70M, now corrected to $34-41M |
BNKR | $62.68M | Bank or liquidity provider within the ecosystem | 24-hour increase of 16.4% |
● PayAI has surpassed PING to become the ecosystem leader, marking a key turning point.
● As the Facilitator (Payment Promoter) of the x402 protocol, PayAI provides payment verification and settlement services for AI agents and APIs. Its number of sellers has reached over 82% of Coinbase’s, and the gap continues to narrow.
● More quality sellers mean buyers have richer choices, which will attract more traffic and form a “more sellers → influx of buyers → ecosystem prosperity” positive cycle.
III. The Truth Revealed by On-Chain Data
x402 protocol activity saw a massive surge in late October 2025, with weekly transaction numbers up 492.63% from the previous week, reaching 156,492 transactions, a record high. This growth was mainly driven by the minting boom of ecosystem tokens (especially $PING), serving as a large-scale real-world stress test for the protocol.
The x402 protocol demonstrates overwhelming advantages in micropayment scenarios, representing not just incremental improvement but a paradigm shift for micropayments.
Comparison of Key On-Chain Metrics
Metric Type | x402 Protocol (Base Chain) | Traditional Payments (e.g., Credit Cards) |
Single Transaction Cost | Less than $0.0001 | Approx. $0.30 fixed fee + 3% transaction fee |
Settlement Speed | On-chain final confirmation in about 2 seconds | Final settlement takes several days |
Risk Characteristics | On-chain payments are final and irreversible once confirmed | Transaction reversal risk for up to 120 days |
Micropayment Feasibility | Supports transactions as low as $0.001 | Not feasible due to high fees |
IV. Major Players’ Deployment and Capital Movements
The rapid rise of the x402 protocol is inseparable from the support of a carefully constructed, cross-industry strategic alliance.
Core Development Timeline:
● May 2025: Coinbase officially releases the x402 protocol, jointly launched with partners such as AWS, Anthropic, Circle, and NEAR.
● September 15, 2025: Google announces the integration of x402 into its Agent Payments Protocol, marking official endorsement by an internet giant.
● September 23, 2025: Coinbase and Cloudflare jointly launch the x402 Foundation to ensure open governance and neutrality of the protocol.
● October 13-14, 2025: Visa announces support for the x402 standard through its Trusted Agent Protocol.
The alliance also includes industry leaders such as AWS, Circle, Anthropic, and Vercel, clearly indicating that all parties are committed to making x402 a universal industry standard rather than a proprietary tool of any single company.
a16z, as a top venture capital firm firmly supporting the “agent-based business” track, has invested in ecosystem-related projects such as Catena Labs, believing that protocols like x402 far surpass Visa and SWIFT in speed, cost, and programmability.
V. Risks and Challenges
Despite the broad prospects of the x402 protocol, it still faces multiple challenges.
● User experience issues are the weakest link for x402. The protocol itself is designed for machines, but humans need to initialize wallets, manage private keys, and purchase stablecoins. This requires user-friendly “agent management platforms” to completely hide the complexity.
● Security and regulatory risks cannot be ignored. Malicious prompt injection and infinite spending loops are potential threats. In addition, x402’s reliance on stablecoins puts it directly under the scrutiny of financial regulators. From a network effect perspective, x402 needs enough service providers and user agents, which is a classic “chicken and egg” problem.
● Speculative concept tokens are also a major risk. Many “x402 ecosystem tokens” on the market have no direct connection with the official protocol. Abstract developer Jarrod Watts warns: “I expect to see a wave of new AI currencies emerge in the coming weeks to ride this trend. And they may be completely meaningless.”
VI. Future Outlook and Key Points to Track
The x402 V2 version is about to launch, aiming to optimize the protocol for enterprise-level reliability and scalability.
● Six core upgrade directions include:
1. Clearer three-layer architecture. Aims to clarify the boundaries of responsibility through a clearer three-layer architecture, helping to improve the modularity and maintainability of the entire protocol.
2. Separation of resources and payments. Plans to separate resource descriptions (such as the URL and type of requested data) from payment instructions (such as amount and receiving address).
3. Universal network naming. A universal network naming mechanism, aiming to use a unified format to refer to assets on different blockchains as well as traditional payment methods.
4. Delayed payment support. This is an important optimization for high-frequency micropayment scenarios. Delayed payment support allows the client to batch settle multiple small payments within a certain time or number of transactions.
5. Improved error handling. For developers, clear and detailed error information is crucial. The V2 version is committed to providing more comprehensive error handling and debugging mechanisms.
6. Backward compatibility. Any successful protocol upgrade must consider protecting the existing ecosystem. The x2 version solemnly promises backward compatibility, ensuring that all integrations based on V1 can continue to run seamlessly in the V2 environment.
With the integration of mainstream protocols such as Google AP2 and Visa TAP, and the support of infrastructure giants like Cloudflare and Vercel, x402 is moving from an experimental protocol to a mature industry standard.
● Investors should closely monitor the following core developments:
1. Can ecosystem applications shift from token minting to real business scenarios? Currently, most activity is driven by token minting; in the future, more cases like RWA.LTD using x402 for actual e-commerce payments are needed.
2. Adoption of the x402 V2 version? This will determine whether the protocol can support large-scale commercial use.
