Author｜Figo @IOSG
The Underlying Architecture of the Internet Was Never Designed for "Payments"
The original goal of the internet was to transmit information, not value. Protocols like HTTP and DNS allow data to be transmitted instantly on a global scale, but they do not have built-in native charging mechanisms. HTTP reserved a status code 402 Payment Required for scenarios where access requires payment, but because there was no machine-programmable, verifiable payment method at the time, this status code was shelved for over thirty years and has never been truly enabled.
Result: A Set of "Patchwork" Workarounds Emerged
To monetize content, developers had to stack various external systems on top of the protocol layer:
- Subscription accounts linked to credit cards
- API key models with monthly billing
- Advertising-based business models where users indirectly pay with "attention or data"
All these systems assume "users are humans." They rely on registration, login, forms, and intermediaries, and are not suitable for autonomously operating software or machines.
The Internet Is Entering the Era of "Software as User"
We are entering a new usage paradigm: it is not humans initiating requests, but the software itself.
- AI agents are independently requesting data, calling models, and executing tasks
- Digital services are shifting from subscription-based to "pay-per-call," charging by each API call, each inference, or per millisecond of computing power
In this scenario, traditional payment methods (credit cards, account top-ups) completely fail. Machines need an "embedded payment mechanism at the protocol level" to achieve automatic settlement without human intervention.
The internet already has the bandwidth for machine-to-machine communication; now it needs native capabilities for machine-to-machine transactions.
The Emergence of x402: Activating the Native Payment Layer of the Internet
x402 is an open payment standard launched in 2025, aiming to officially activate the HTTP 402 status code and turn it into a native payment mechanism for the internet. Compared to traditional models that require account creation, credit card binding, or prepayment, x402 embeds payment requests directly into HTTP responses, allowing clients (whether human, robot, or AI agent) to automatically recognize payment information and complete settlement.
In short, x402 enables an HTTP request to have both "data transmission" and "value transmission" attributes. As long as payment is completed, access is instantly granted, with no need for accounts or manual operations.
The Standardized Interaction Model of x402
x402 defines three types of participants:
- Client: The user, application, or AI agent initiating the request
- Server: The entity providing data or services (API, website, etc.)
- Facilitator: Responsible for verifying whether payment is completed. Most current implementations are blockchain-based, but theoretically any system with verifiable settlement capabilities can be integrated
Basic Process:
1. The client requests a resource (e.g., GET /premium-data)
2. The server returns HTTP 402, along with payment conditions (asset, amount, receiving address, etc.)
3. The client initiates payment using stablecoins (such as USDC)
4. The facilitator verifies payment completion
5. The client re-initiates the request, attaching proof of payment
6. The server returns the data
This process is fully programmable, requiring no human intervention or account system.
▲ x402 Payment Process (Source: x402 Whitepaper)
Core Differences Between x402 and Traditional Models
By analogy: HTTPS did not create new websites, but it made "secure communication" a native capability of the internet; similarly, x402 is not a new application, but rather brings "payment" down to the internet protocol layer, making value flow, like data flow, a fundamental function of the internet.
Why Now, and What Changes Will It Bring
The underlying assumption of the internet has always been "users are humans"—they open browsers, log into accounts, and manually complete payments. However, this premise is failing. AI agents and automated systems are gradually becoming active participants on the internet; they autonomously request data, call services, execute operations, and no longer need humans in the loop to approve every interaction. For these agents to truly participate in economic activity, they must not only be able to make requests, but also have the ability to complete payments instantly and programmably.
Why This Moment Is a Turning Point
Multiple key technology trends are converging to create the conditions for x402’s implementation:
- Stablecoins have become the native currency of the internet, providing machines with a globally accepted, programmable, and instant-settlement payment asset.
- The emergence of low-cost rollups and high-performance settlement chains makes "pay-per-request" micropayment models economically viable, with transaction costs as low as one-thousandth of a cent.
- AI agents are shifting from passive tools to active economic entities, able to autonomously initiate transactions, purchase services, and create value.
- Agent identity standards such as ERC-8004, and protocols like Google AP2, provide agents with verifiable identities and transaction histories, enabling the network to recognize "who is paying and why."
These trends together form the foundation for x402 to become the native payment transmission layer for machines.
New Models Enabled by x402
x402 allows value to flow freely on the internet just like data. This means payments no longer rely on manual interaction or subscription models, but are oriented toward real-time machine-to-machine economic activity.
On-Demand Transactions for AI and APIs
Agents can pay per call to access data or models, with no need for API keys or prepayment:
- AI agents pay in real time for market data
- Research models unlock proprietary information per retrieval
Autonomous Infrastructure Consumption
Computing power and storage are billed by usage:
- AI agents pay per GPU inference
- Decentralized models charge by number of calls, not by subscription
Autonomous Commercial Activity Between Machines
Digital agents can transact directly:
- In-game AI agents automatically purchase resources
- IoT devices automatically pay for bandwidth or sensor data as needed
This shift is upgrading the internet from an "information network" to a "machine economy network"—a market system composed of agents that can natively complete payments, purchases, and coordinate services at the protocol layer.
Ecological Momentum Is Forming
x402 is no longer limited to the crypto-native field, but is being adopted by institutions operating at the foundational layers of the internet and payments. This indicates that x402 is on the path to standardization and is likely to become the underlying component for native machine transactions on the internet. Mainstream industry research, including from a16z, has mentioned in reports that x402 is one of the key solutions to AI payment and settlement challenges.
▲ Crypto Solutions Addressing AI Challenges (Source: a16z "State of Crypto 2025" Report)
Key Forces Driving Adoption
Cloudflare: Internet Infrastructure Integration
Cloudflare is integrating x402 payment processing directly into its global edge network, enabling payment logic to be executed at the infrastructure layer rather than as application-layer code. At the same time, Cloudflare has launched NET Dollar, a USD stablecoin for machine automatic settlement, enabling instant confirmation and global coverage. Cloudflare has explicitly stated that the next generation of internet business models will be based on micropayment interactions between agents.
Google: Agent Payments Protocol (AP2)
Google has launched the Agent Payments Protocol (AP2), enabling AI agents to initiate authentication, payment, and settlement operations in both Web2 and Web3 environments. AP2 itself is payment-neutral, but natively supports x402-based crypto payment extensions, making x402 likely to become the default settlement layer for agent economies in Google Cloud, consumer applications, and enterprise services.
Visa: Trusted Agent Protocol
Visa has launched the Trusted Agent Protocol to ensure that AI agents initiating payments can be verified, authorized, and associated with real user intent. This protocol is built in collaboration with Cloudflare and aligned with x402, providing identity and trust infrastructure for mainstream compliance scenarios.
Rapid Growth in Usage
In the past month, as more services have integrated this standard and autonomous agents are preparing to initiate payments via x402 endpoints, x402 usage has accelerated.
In the past 30 days (data from x402scan):
- Number of transactions: 1.35 million
- Total payments: $1.48 million
- Active paying agents: 72,150
- Valid payment endpoints: 960
It is worth noting that most of this growth occurred in the past 7 days, indicating that the adoption curve has entered an acceleration phase.
▲ x402 Global Statistics (Past 7 Days, Source: x402scan)
This wave of growth has been mainly driven by speculative experiments based on x402 (such as minting tokens via x402 endpoints). Although these activities are speculative in nature, they serve as stress tests and have significantly increased developer attention to x402 as a payment primitive.
Ecological Landscape
▲ x402 Ecosystem Market Map (Source: @henloitsjoyce)
Prediction markets have long focused on binary settlement, resulting in significant information reduction. Future socially-aware oracles will need to access more data sources and use dynamic models to comprehensively evaluate different data. In discussions with defi projects related to Polymarket, it became clear that there is significant design space for dynamic settlement data during ongoing market activity. Supporting more continuous prediction markets, such as real-time in-play trading for sports events, presents major opportunities in continuous price markets or combinatorial markets like parlay, but current oracles do not support this.
The x402 ecosystem is rapidly expanding, covering settlement service providers, infrastructure providers, agent platforms, and application services. This trend indicates that x402 is gradually becoming the infrastructure layer for other machine protocols.
Outlook
x402 is still in its early stages, and there is indeed a certain degree of speculation in current market attention. However, this short-term sentiment does not obscure the underlying structural shift it represents: for the first time, payments can be implemented at the same protocol layer as data transmission, enabling autonomous agents to natively complete transactions on the internet without account systems, intermediaries, or manual authorization.
The long-term value of x402 does not lie in the standard itself, but in the entire new infrastructure it activates: including agent identity standards, programmable wallets, low-latency settlement networks, and coordination protocols between machines. Regardless of whether x402 remains the ultimate payment standard in the future, it has already set an irreversible direction—the internet is evolving from "providing information for humans" to a network "driven by software-enabled economic activity."
