On October 27, 2025, Solana co-founder Toly reposted an article by aryan titled "x402 solves the internet's original sin: advertising" and stated, "x402 is really amazing." According to Dune data, the weekly transaction count for the x402 protocol increased by 492.63% compared to last week, reaching 156,492, setting a new historical high.
What is the x402 protocol? How is it different from traditional payments? Will x402 spark another Meme wave? Is it speculation or real value?
I. What is the x402 protocol?
x402 is a new open payment protocol developed by Coinbase that enables instant, automatic stablecoin payments directly through HTTP. It was launched on May 6 this year.
The name "x402" comes from the HTTP status code 402 – "Payment Required," a classic web standard now being reimagined to transform any web request into an instant payment transaction using stablecoins like USDC on any blockchain.
By reviving the HTTP 402 Payment Required status code, x402 allows services to monetize APIs and digital content, enabling clients (including humans and machines) to programmatically pay for access without needing accounts, sessions, or complex authentication.
Sellers and buyers interact directly via HTTP requests, with payments handled transparently through the protocol.
Seller: Service providers looking to monetize their APIs or content. x402 enables direct programmatic payments from customers with minimal setup.
Buyer: Human developers and AI agents seeking access to paid services without accounts or manual payment processes.
x402 supports a range of use cases, including:
Pay-per-request API services;
AI agents autonomously paying for API access;
Digital content paywalls;
Monetizing microservices and tools via microtransactions;
Proxy services aggregating and reselling API functionality.
One of the most practical use cases for x402 is API monetization. In the current model, developers must manually create keys, handle access tiers, and enforce rate limits. With x402, an API can simply respond to unauthenticated requests with a 402, indicating, for example, that accessing a data endpoint costs $0.001.
The client can then send the required stablecoin payment and receive an immediate response. This turns APIs into microservices with embedded pricing, enabling granular monetization at the individual function call level. This model is ideal for AI workloads and human developers who prefer pay-as-you-go pricing.
x402 is designed for the modern internet economy, addressing key limitations of legacy systems:
Reduced Fees and Friction: Direct on-chain payments eliminate intermediaries, high fees, and manual setup.
Micropayments and Usage-Based Billing: Charge per call or feature via simple, programmable pay-as-you-go processes.
Machine-to-Machine Transactions: Enable AI agents to autonomously pay for and access services without keys or human input.
II. How x402 Differs from Traditional Payment Systems
Today's online payment systems are slow, expensive, and often region-locked.
X402 removes these barriers by allowing servers to request and receive payments directly through the protocol itself. No logins, billing dashboards, or delayed bank transfers are needed. Value transfer is embedded into the fabric of the internet and optimized for agents and applications.
x402 stands in stark contrast to traditional payment infrastructure. x402 is protocol-first, built on crypto rails, whereas systems like Visa, Stripe, and PayPal are platform-first. X402 uses on-chain transactions, settling payments in seconds, compared to traditional payments which often take one to three business days.
Furthermore, x402 supports micropayments as small as fractions of a cent, enabling high-frequency, low-cost interactions—something impossible on credit card networks due to high fees. It's also globally designed, requiring no currency exchange or regional banking relationships. Chargebacks, fraud risk, and intermediary fees are nearly eliminated due to the immutability of on-chain transfers.
Traditional systems focus on human users with front-end interfaces, while x402 enables machine-native, back-end-to-back-end monetization.
III. Will x402 Spark a New Meme Wave?
According to Dune Analytics data, there were nearly 500,000 x402 transactions between October 14 and 20, representing a 10,780% increase compared to levels four weeks prior.
KuCoin Ventures pointed out on X that developers are now leveraging x402's design to launch tokens directly—thus triggering a wave of x402-powered Memecoin launches.
"x402 embeds payment functionality into the native HTTP request-response: Client accesses endpoint → Server returns 402 response with x402-PayTo header → Client pays → Coinbase and other services fetch on-chain events for confirmation. Zero redirects, zero UI changes, zero middlemen, zero accounts, zero waiting. Pure HTTP protocol with a paywall.
Developers are leveraging x402's design to issue tokens directly—this is driving the current wave of x402-enabled Memecoin launches. Instant fair launch mechanism. x402 is no longer just a specification; the community has turned it into a Launchpad killer."
The x402 protocol token PING once made a splash. On October 25, PING's market cap briefly exceeded $57 million. Within just one week, its trading volume exploded by 8,200%, largely driven by attention on x402. However, as PING's value heavily depends on attention, engagement related to Base and Coinbase innovations, and broader market sentiment, without substantial value support, its market cap fell below $30 million just two days later, with a 24-hour drop of 41.7%.
x402 has once again drawn attention to the Meme frenzy. While it may bring more traffic to x402 in the short term, it also easily leads investors to equate it with speculation, overshadowing its original nature as a payment protocol.
IV. The Impact of the x402 Protocol
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Unlocking AI Agent Use Cases
By embedding payments into the most fundamental HTTP protocol, x402 provides a seamless "economic layer" for value exchange between AIs, and between AIs and humans, enabling machines to autonomously consume and pay for services like humans. The x402 protocol essentially transforms AI agents from tools requiring constant human interaction into autonomous economic participants capable of independently discovering, purchasing, and utilizing resources to achieve their goals.
Erik Reppel, Engineering Lead for Coinbase's Developer Platform and co-author of the x402 whitepaper, stated: "We are laying the foundation for an economy run not only by people but also by software—autonomous, intelligent, and always on." Gagan Mac, VP of Product Management at Circle, said x402 "elegantly simplifies real-time monetization" and unlocks "exciting new use cases like micropayments for AI agents and applications."
Coinbase development team members Kevin Leffew and Lincoln Murr once stated that without human intervention to manage API calls, storage, and computation, agent AIs could accomplish everything from self-driving taxis paying their own costs using stablecoins to applications automatically using stablecoins for permanent data storage.
AI agents can already trade cryptocurrencies by analyzing market data, executing buy or sell orders, and optimizing portfolios in real-time without human intervention. a16z once predicted: by 2030, autonomous crypto trading volume could reach $30 trillion.
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x402 Might Disrupt Traditional Online Advertising
As pointed out in aryan's article, the internet's "original sin" lies in its advertising-dependent business model, which leads to data harvesting and privacy violations. x402 allows consumers and publishers to pay and charge for content, enabling agent micropayments. This provides content creators and service providers with a viable monetization path beyond advertising, potentially pushing the internet towards a direction that focuses more on the direct value of content and a purer user experience. -
Driving Cryptocurrency into Mainstream Adoption
The global micropayments enabled by x402 can unlock previously impossible business applications, surpassing today's online payment systems. Moreover, x402 does not require users to understand complex blockchain concepts. By embedding the use of stablecoins directly into the HTTP protocol, it can make cryptocurrency a "usage credential for basic internet services," significantly lowering the barrier to entry for cryptocurrency and integrating it with the entire internet economy. Cryptocurrency will no longer be a niche investment but will reach millions of households.
V. Is x402 Potential or Bubble?
Proponents believe x402's advantage lies in its ability to simplify and standardize payment processes for AI agents. Traditional payment methods are slow, prone to chargebacks, and require manual intervention. In contrast, x402 uses cryptocurrency to achieve instant, trustless payments between AI agents and API providers.
Additionally, the current low market capitalization of x402 tokens indicates strong upside potential.
However, Jarrod Watts, a builder at Abstract, warned: "I expect to see a wave of new AI currencies emerge in the coming weeks to fuel this hype. And, they might be completely meaningless, but 'would you rather be right, or would you rather be rich?'"
Analyst 0xJeff also referred to them as "x402 memecoins," noting that only projects with real or near-commercial products are likely to survive long-term.
