x402 Resonates with Technology: A New Narrative is Brewing

Author: Trend Research Source: medium

Recently, the emergence of $PING has driven the spread of the x402 concept. Two representative projects, $PING and $PAYAI, reached highs of 75m and 70m respectively. Although they fell back to 30m and 20m respectively due to weak market liquidity, unlike pure meme narratives, x402 and its concept have a certain degree of derivation and sustainability. The market still craves new narratives and opportunities for profit, making related narratives worth paying attention to.

I. Why x402 is Worth Paying Attention To

1. The biggest pain point in Crypto development is the scarcity of projects that solve real-world problems and the lack of cash flow driven by genuine demand. x402 approaches the issue from the perspective of native internet payments. Given the current trend of large institutions promoting the adoption of stablecoins in the US and the further development of AI, it is expected to generate real payment demand starting from a small scale.

2. The driving forces and adopters behind x402 include Coinbase, Google, Cloudflare, Circle, Visa, and AWS, possessing a large customer base and consumption scenarios. 3. x402 can form user-perceptible use cases on the product side, such as making payments through digital wallets without adding bank cards or performing KYC, and even allowing AI agents to directly complete the entire shopping process. 4. The further development of AI will inevitably spur the demand for machine-to-machine transactions and micropayments, and blockchain may be the ultimate infrastructure for AI and machine interaction. II. Deconstructing x402 402 is the HTTP status code "Payment Required," which has been reserved but almost never used, representing a payment request. x402 will optimize and enable it. Its structure is very simple and can be explained with a single diagram. A complete transaction process using the x402 protocol initially involves four roles: 1. Client The client is the party initiating the payment request. It can be any entity that needs to access a service or resource, such as an AI agent, user device, or application. The client's main responsibilities are: Initiating the request: The client requests access to a resource or service. Processing the payment: When the server returns a payment request (HTTP 402), the client signs the payment request and executes the payment. The client can use tools such as wallets to sign transactions and provide payment authorization. Example: An AI agent needs to obtain real-time market data from a data provider. It initiates the request as a client and will not receive the data until payment is completed. 2. Server A server is a provider of services or resources. Its main responsibilities are: Returning an HTTP 402 response: When a client requests access to a resource, if there is no valid payment information, the server will return an HTTP 402 status code, indicating that payment is required to continue access. Verifying payment and providing services: The server verifies the client's payment request to ensure that payment has been completed. If the payment is successful, the server will process and return the requested data or service. Example: An API service provider receives a client request, finds that there is no payment, and returns an HTTP 402 response requesting payment. After payment is completed, the service provider will return the data or service to the client.

3. Facilitator

A facilitator acts as an intermediary in the payment process, typically a payment gateway or middleware service, ensuring that payment requests are successfully transmitted and ultimately completed. The main functions of a facilitator are:

Coordinating payment requests and responses: It handles payment interactions between clients and servers, ensuring that payment requests are sent correctly and forwarding payment information to the payment processor.

Transaction broadcasting: A facilitator may broadcast payment requests or transaction confirmations to the blockchain.

For example: In a payment process, a facilitator might be a wallet application or payment gateway that receives payment requests from clients and broadcasts them to the blockchain for settlement after the transaction is completed.

4. Blockchain Blockchain is the underlying technology of the x402 process, used to ensure the security and transparency of transactions. The core responsibilities of blockchain include: Ensuring the immutability of payments: Once payment information is recorded on the blockchain, it cannot be modified or revoked, ensuring the authenticity and integrity of the transaction. Providing a transparent settlement system: All transaction data is publicly available on the chain, allowing all parties to verify the payment status. Settlement and transaction processing: Once the Facilitator confirms the payment, the blockchain processes and ultimately settles the transaction, ensuring that funds flow from the client to the server provider. For example: When a client completes a payment, the payment request is transmitted to the blockchain through the Facilitator, ensuring that the funds flow between the correct addresses, completing the settlement.

A process:

① Client sends an HTTP request - The client sends a standard HTTP request to the resource server to obtain a protected endpoint.

② Server responds with 402 - The resource server returns an HTTP 402 Payment Required status code and provides payment details in the response body.

③ Client creates payment - The client checks the payment request and creates a payment payload using its wallet according to the specified scheme.

④ Customer Resubmits Payment - The customer resends the same HTTP request, this time including a header containing a signed payment payload with X-PAYMENT. ⑤ Server Verifies Payment - The resource server verifies the payment payload using: Locally (if running their own verification) Through an intermediary service (recommended) ⑥ Payment Provider Verification - If a payment provider is used, it checks the payment against the scheme and network requirements and returns a verification response. ⑦ Server Processes Request — If the payment is valid, the server completes the original request. If the payment is invalid, another 402 response is returned. ⑧ Payment Settlement — There are two ways for the server to initiate blockchain settlement: Directly by submitting to the blockchain; or via the coordinator's /settle endpoint. ⑨ Payment Processor Submits On-Chain Transaction — The payment processor broadcasts the transaction to the blockchain according to the payment network and waits for confirmation. ⑩ Settlement Confirmation — Once confirmed on-chain, the settlement party will return a payment execution response.

⑪ Server delivers resources - The server returns a response with the following content:

The requested resource in the response body

X-PAYMENT-RESPONSE contains the title of the settlement details

In short, x402 is an open payment standard that eliminates traditional barriers such as API keys, subscription models, and manual settlement, realizing an efficient and frictionless payment system, which is particularly suitable for machine-to-machine (M2M) or AI-driven application scenarios.

III. The Narrative is Brewing

Understanding the structure makes it easy to see that the emergence of new crypto projects may revolve around Client, server, Facilitator, Blockchain, and transaction processes.

Currently, most servers are provided by existing web2 resource providers. Clients, which were hyped during the previous AI agent boom but lack genuine, practical applications, are the focus recently. Ping (related to transaction processes), PayAI Network (Facilitator), and Kite AI (Blockchain) are among the tokens attracting attention. Ping is the first token to use the x402 protocol for minting and distribution. The market compares it to inscriptions, because when a user sends USDC to a specific address on the Base chain, it's just a regular ERC-20 transfer. However, the project team uses x402scan as an "indexer" to give it an off-chain meaning. "Sending USDC to a specified address via the x402 protocol is equivalent to mint, sending coins to the address initiating the transaction." While Ping itself doesn't have much practical use, its chosen angle is clever, currently serving as the first "billboard" to break into the mainstream, similar to the x402 concept meme coin.

2. PayAI Network

Possesses itself as an x402 Facilitator (matching/acquiring/verification/settlement layer), targeting Solana.

Prioritized and cross-chain, it has practical use cases compared to Ping. Similar examples include Daydreams and OpenX402, but the core remains Coinbase's own Facilitator.

3. Kite AI

positioned as "the first public chain for AI payments," its goal is to "write" x402 payment primitives into the underlying layer, focusing on Agent↔Service settlement/reconciliation/intent execution. It uses x402 as the interoperability layer: Agent Payments are initiated via standardized intent/authorization envelopes, with the service provider verifying terms and settling accounts; native support for payment primitives such as reconciliation, peer-to-peer instructions, and batch aggregation is provided. The investor lineup is impressive, including PayPal Ventures, Coinbase Ventures, Hashed, Samsung Next, and HashKey Capital. Looking back, traditional companies like Coinbase began launching x402 as early as May, and it's still under accelerated development. Coinbase CEO Brian Armstrong stated on November 2nd, "x402 allows stablecoin payments to be attached to any web request, which will become an important part of the new internet." Currently: 1. Visa supports the x402 standard, participates in its support and standardization, and promotes its development in traditional payment networks, which is seen as a signal of future large-scale adoption. 2. Cloudflare and Coinbase jointly created the x402 Foundation, providing technical support and extension proposals. 3. Anthropic supports the x402 protocol for AI and infrastructure payments. 4. Circle develops integration tools to combine USDC and wallets with x402. 5. Google is investing in the x402 protocol and participating in related investment and development opportunities. 6. AWS supports the x402 protocol for AI and infrastructure payments. While the hype surrounding the x402 concept project has cooled somewhat, this brief surge has highlighted the market's demand for incremental technological innovations and real-world use cases. On one hand, there's the underlying technology development and self-adoption by traditional technology and financial companies; on the other hand, there's the emergence of numerous crypto projects. A new narrative about AI and payments is visibly brewing.