x402 is an open-source payments protocol developed by Coinbase that is built on the HTTP standard. It utilizes the historically dormant 402 Payment Required status code to enable internet-native, machine-to-machine micropayments using on-chain assets like stablecoins.

Overview

The x402 protocol was designed to address perceived inefficiencies in traditional online payment systems, such as credit cards and bank transfers, which are often characterized by high friction, slow settlement times, and a lack of suitability for programmatic or automated transactions. ^[8] The project's core philosophy is that payments on the internet should be as seamless and native as the flow of information. It aims to create a payment rail that is equally accessible to human users and autonomous AI agents, facilitating a pay-per-use economy for digital resources like API calls, data access, and cloud computing. ^{[6] [1]}

Coinbase positioned the protocol as a way of "fixing the internet's first mistake," arguing that traditional payment rails were built for a "pre-internet world" and are slow, expensive, and geographically limited. ^[8] The protocol resurrects the experimental HTTP 402 status code to create a payment system native to the internet, embedding stablecoin payments directly into web interactions. With the rise of machine-to-machine interactions and AI-driven services, the protocol aims to provide a payment layer that is instant, programmable, interoperable, and trust-minimized. ^[9]

The protocol is designed as an open standard to prevent reliance on any single party. It is chain

• and token-agnostic, allowing for extensibility to new blockchain networks and digital assets. By integrating directly into the standard client-server HTTP request flow, it avoids the need for separate payment interfaces or complex user authentication processes like OAuth. The inspiration for x402 draws from earlier work on crypto micropayments by figures such as Balaji Srinivasan at 21.co, with the recent emergence of low-cost Layer 2 blockchains like Base making the concept more economically viable. ^[7]

In the announcement of the protocol, Erik Reppel, Head of Engineering at Coinbase Developer Platform, stated: "Just like HTTPS secured the web, x402 could define the next era of the internet; one where value moves as freely and instantly as information. We’re laying the groundwork for an economy run not just by people, but by software—autonomous, intelligent, and always on.” ^{[7] [8]} The protocol emphasizes trust minimization, with payment schemes designed to prevent intermediaries from misusing a client's funds. It also prioritizes ease of use for developers, aiming for a "one-line" integration to abstract away crypto-related complexities like gas fees and RPC node management. ^[6]

History

The development of x402 was led by the Coinbase Developer Platform, with the project's whitepaper authored by Erik Reppel, Ronnie Caspers, Kevin Leffew, Danny Organ, Dan Kim, and Nemil Dalal. ^[2]

Key milestones in its early history include:

• February 27, 2025: The project's Apache-2.0 license file was created in its official repository, marking an early foundational step.
• April 25, 2025: A significant commit established the core TypeScript ecosystem, including multiple npm modules for frameworks like Express, Next.js, and Hono.
• May 6, 2025: Coinbase publicly announced the launch of the x402 open standard and published its official whitepaper. The announcement included details of the protocol, its accompanying tools, and a list of launch collaborators. ^[8]
• June 13, 2025: ROADMAP.md and PROJECT-IDEAS.md files were added to the repository, outlining the future direction and potential applications for the protocol.
• August 30, 2025: Support for the Solana blockchain (SVM) was added, demonstrating the protocol's multi-chain capabilities beyond its initial EVM focus.

These events illustrate the project's progression from conception to a publicly launched, multi-chain protocol. ^{[6] [7]}

Technology

The x402 protocol is built directly into the existing HTTP framework, leveraging standard status codes and headers to facilitate payments without requiring a new communication layer.

Core Mechanism

The protocol's functionality is centered on the HTTP 402 Payment Required status code, which was defined in early web standards but has remained largely unused for over 25 years. When a client requests a protected resource from an x402-enabled server, the server can respond with a 402 status. This response includes a JSON body containing the payment details, such as the required amount, recipient address, and the accepted token and blockchain network. The client then uses this information to construct, sign, and attach a payment payload to a subsequent request for the same resource. The server verifies this payload before granting access. This entire process occurs within a standard request-response cycle. ^{[2] [3] [9]}

Architecture

The x402 architecture involves three primary actors:

• Client: The entity paying for a resource. This can be a web browser, a command-line application, or an autonomous AI agent. The client is responsible for creating and signing the payment payload.
• Resource Server: The HTTP server that provides the paid resource, such as an API endpoint or a digital file. This server is responsible for issuing the 402 challenge and verifying the payment before fulfilling the request.
• Facilitator Server: An optional but recommended third-party service that handles on-chain payment verification and settlement. By offloading these tasks, the resource server does not need to maintain a direct blockchain connection, manage a wallet, or handle private keys, simplifying its operational requirements.

This architecture allows for a separation of concerns, where the resource server focuses on providing its core service while the facilitator handles the complexities of blockchain interaction. ^[6]

Protocol Flow

The payment and resource access process follows a defined sequence of steps:

1. Initial Request: A client makes a standard HTTP request to a resource server for a protected resource.
2. Payment Challenge: The server responds with an HTTP 402 Payment Required status. The response body contains a JSON object detailing the accepted payment methods, including price, currency, and network.
3. Payment Payload Creation: The client selects a payment method and uses its wallet to create and cryptographically sign a payment payload. This is often done using standards like EIP-712 to ensure the signing message is human-readable.
4. Paid Request: The client sends a new HTTP request for the same resource, this time including the signed payment payload in a custom X-PAYMENT header.
5. Verification: The resource server receives the paid request and verifies the payment payload. It can do this locally or by sending the payload to a facilitator server's /verify endpoint.
6. Fulfillment: If verification is successful, the resource server processes the request and generates the resource.
7. Settlement: The resource server settles the payment. This can be done by interacting with the blockchain directly or by sending the verified payload to the facilitator server's /settle endpoint.
8. Confirmation: The facilitator server submits the transaction to the blockchain, waits for confirmation, and returns the result (including the transaction hash) to the resource server.
9. Final Response: The resource server sends a 200 OK response to the client, delivering the requested resource. It may also include an X-PAYMENT-RESPONSE header with details of the successful transaction.

This flow integrates payment directly into the web's native communication protocol, using the custom headers to manage the transaction without altering how HTTP fundamentally works. ^{[6] [7] [9]}

Key Concepts

• Schemes: Logical methods for moving funds. The protocol is designed to be extensible with different schemes. The first proposed scheme is exact, used for transferring a specific, predefined amount. A future theoretical scheme, upto, could be used for payments up to a certain amount based on resource consumption, such as for LLM token generation.
• Networks: The protocol is blockchain-agnostic and functions by supporting (scheme, network) pairs, such as an exact payment on Ethereum or Solana.
• Facilitator API: The facilitator server exposes a simple API to assist resource servers. Key endpoints include POST /verify to validate a payment payload, POST /settle to submit a payment to the blockchain, and GET /supported to list the payment schemes and networks the facilitator supports.

These concepts provide a flexible and extensible framework for internet-native payments. ^{[6] [3]}

Bazaar Discovery Layer

The x402 Bazaar is the discovery layer for the protocol's ecosystem, described by Coinbase as a "search engine for agents" and the first discovery layer for agentic commerce. It functions as a decentralized, open network where servers advertise their paid services by hosting a machine-readable x402.json manifest file, typically at a .well-known/x402.json path. This file lists the available resources, API endpoints, pricing details, and accepted payment methods, creating a marketplace for AI agents to autonomously discover and pay for APIs without human intervention. The primary purpose of this system is to solve tool discovery for AI, allowing agents to dynamically find and use new services as they are added to the ecosystem. This unlocks a new class of self-improving, adaptive agents that can evolve in capability as the network of available tools grows, enabling them to perform complex, multi-step tasks like researching data, commissioning AI-generated art, or booking services automatically. ^{[4] [5] [6]}

Comparison with Traditional Systems

x402 vs. Traditional Payment Rails

The design of x402 presents a fundamental shift from traditional online payment systems like Visa, Stripe, and PayPal. While traditional systems are platform-first and human-centric—requiring logins, user accounts, and manual steps—x402 is protocol-first and optimized for machine-to-machine interactions. Key differences include:

• Settlement Time: x402 payments can settle in seconds via on-chain transactions, whereas traditional rails typically take one to three business days.
• Micropayments: The protocol supports payments as small as fractions of a cent, a model that is infeasible on credit card networks due to high fixed fees.
• Global Access: As a crypto-native protocol, x402 is global by design and does not require currency conversions or regional banking relationships.
• Overhead: It aims to virtually eliminate chargebacks, fraud risk, and intermediary fees by leveraging the immutability of on-chain transfers.
• Integration: Traditional systems require complex integrations with centralized processors and often involve redirects. x402 embeds payment directly into the HTTP protocol, removing the need for separate interfaces.

This structure enables a backend-to-backend monetization model that is native to the internet's architecture. ^[9]

Incumbent Approaches to AI Payments

Major payment incumbents have also begun exploring AI-powered and stablecoin-based payments. Visa has announced initiatives for AI agents to make purchases, Stripe has introduced stablecoin financial accounts, and PayPal has launched its own stablecoin (PYUSD) with a rewards program. However, these efforts operate within centralized, "walled garden" ecosystems. Their services are permissioned, governed by corporate policies, and require onboarding and platform approval. In contrast, x402 is an open and permissionless protocol, allowing any developer to integrate it without needing a merchant account or approval. This distinction between a closed service and an open protocol is central to x402's goal of creating a more decentralized, agent-driven economy. ^[9]

Monetization and Fees

The x402 protocol itself is an open standard and does not impose any fees on merchants or customers. It is free to implement and use. However, transactions conducted using the protocol are subject to the standard network fees (gas fees) of the underlying blockchain on which the payment is made. By leveraging low-cost Layer 2 networks, these fees can be nominal, making micropayments as low as $0.001 economically feasible. This model contrasts with traditional payment systems, which often include a fixed fee plus a percentage of the transaction value. ^{[1] [2]}

Stablecoins like USDC are central to the protocol's function. Their price stability allows agents and developers to transact in predictable units without exposure to crypto market volatility. Furthermore, stablecoins on high-speed chains like Base or other Layer 2s offer fast finality, with transfers confirming in seconds for minimal fees, making them ideal for the high-frequency, low-value transactions x402 is designed to handle. ^[9]

Use Cases

The protocol is designed to enable new monetization models for the digital economy, particularly for programmatic and automated systems.

AI Agent Economy

A primary focus of x402 is to provide a payment layer for "agentic commerce," where autonomous AI agents can transact without human intervention. This allows agents to pay for resources on demand as they perform tasks, transforming them from tools that require constant human interaction into autonomous economic actors. ^[8]

• Autonomous Compute: Agents can pay for GPU resources or cloud services per inference or per second of use.
• Data Acquisition: Agents can autonomously purchase access to real-time market data, proprietary datasets, or articles from premium sources on a per-query basis.
• Automated Workflows: An agent could manage a supply chain by paying for logistics APIs, place bets in prediction markets, or acquire digital assets as part of a larger automated strategy.

Illia Polosukhin, co-founder of NEAR, commented on this potential: "Our vision merges x402’s frictionless payments with NEAR intents, allowing users to confidently buy anything through their AI agent, while agent developers collect revenue through cross-chain settlements that make blockchain complexity invisible.” ^[7]

Agentic Payments

The concept of "agentic payments" is central to the x402 use case. These are payments made automatically by software agents, not humans, and are characterized by being fast, programmatic, and often of low value. Traditional payment infrastructure was not designed for this, as it requires manual steps, has high fees, and features slow settlement times, making it unsuitable for autonomous, high-frequency transactions. Agentic payments are crucial for enabling a machine-first economy, allowing for real-time AI decision-making by removing friction from access to paid services and paving the way for composable services where agents can chain together paid APIs autonomously. ^[9]

Developer and Content Monetization

x402 offers developers and creators an alternative to subscription-based or ad-supported revenue models.

• Paid APIs: Developers can monetize each API call with a micropayment, implementing a true pay-as-you-go model instead of tiered subscription plans.
• Software and Content Unlocks: The protocol can be used to enable on-demand, pay-per-use access to premium software features, news articles, videos, or other digital content without requiring subscriptions or credit card minimums. ^[8]
• Metered Services: Cloud storage providers or other infrastructure services can bill based on actual resource consumption, with payments settled in near real-time.

These use cases are facilitated by the protocol's ability to handle small, frequent transactions efficiently and without the friction of user registration or credit card entry. ^{[2] [3]}

Ecosystem and Adoption

x402 was launched as an open-source project with backing from Coinbase and a number of collaborators from the technology and web3 industries.

Development and Backing

The protocol is an initiative of the Coinbase Developer Platform, and its primary repository is maintained under the Coinbase organization on GitHub. The standard is licensed under Apache-2.0, encouraging broad adoption and community contributions. Official developer resources include documentation hosted on GitBook and a Vercel starter template for building AI applications with x402. ^{[6] [3]}

Implementations

Official libraries and SDKs are provided to facilitate integration for both client and server applications in several programming languages:

• TypeScript (with specific packages for Express, Next.js, Hono, Axios, and Fetch)
• Python
• Go
• Java

These libraries aim to simplify the process of implementing the x402 payment flow. ^[6]

Collaborators and Early Adopters

At its launch on May 6, 2025, the project was announced with support from several key organizations.

• Launch Collaborators: AWS, Anthropic, Circle, and NEAR.
• Early Adopters and Builders: A diverse group of companies and projects began building with x402 at launch, including Neynar and XMTP for social applications; Anthropic and NEAR AI for agent interactions; and Chainlink for real-time data demonstrations.

Gagan Mac, vice president of product management at Circle, commented that x402 “elegantly simplifies real-time monetization” and unlocks “exciting new use cases like micropayments for AI agents and apps.” ^[8] Rish Mukherji, founder of early adopter Neynar, noted the protocol's utility: "x402 turns Neynar’s Farcaster APIs into a pure on-demand utility—agents can pull exactly the data they need, settle in USDC on the same HTTP 402 round-trip, and skip API keys or pre-paid tiers entirely." ^[7]

Integration with Vercel's MCP

In September 2025, Vercel announced x402-mcp, a library designed to integrate the x402 payment protocol with the Model Context Protocol (MCP) and the Vercel AI SDK. This collaboration addresses the challenge of AI agents needing to access paid external services without manual setup, such as managing API keys and separate billing. The integration allows developers to define paidTools within their MCP servers, specifying a price for each tool call. When an AI agent needs to use one of these tools, the x402-mcp library facilitates the payment on a per-call basis using x402. This creates a self-sustaining ecosystem where developers can monetize their tools directly, and AI agents can autonomously discover, authorize payment for, and utilize a growing range of capabilities without pre-existing commercial relationships. ^[7]