Coinbase's x402 Protocol Sees 10,000% Increase in Stablecoin Transactions, Fueling New Ecosystem and High Blockchain Efficiency

Last month, the online payments protocol launched by cryptocurrency giant, Coinbase, saw the transaction activity skyrocket by more than 10,000% – a massive increase attributed to the boost in utilisation of artificial intelligence (AI) agents performing transactions in stablecoins online.

What is x402?

The payment protocol in question, titled x402, was released by Coinbase in May earlier this year. According to the company, x402 rectifies the internet’s initial mishap by revitalizing the Internet Communication Protocols Hypertext Transfer Protocol 402, also known as HTTP 402. This protocol has helped establish a comprehensive payment system that is tailored to the digital realm of the internet. The functioning of x402 is fairly simple yet radical. It allows both AI and human users to make direct payments during usage of a website or application. Users request a service or product, are presented with an HTTP 402 Payment Required prompt, and then proceed to make a payment via a signed stablecoin, which is immediately verified by x402, making the process seamless and eliminating the need for credit cards.

How has x402 performed?

According to data published by Dune Analytics, x402 saw nearly half a million transactions between the week of October 14th and 20th alone. This marked an overwhelming 10,780% surge when compared to the number of transactions conducted four weeks prior to the said period. On a specific day, Friday of that week, records showed a sharp spike in transaction activity with 239,505 transactions registered. Furthermore, the day before that accomplished a record for the most transaction volume posted in a single day with $332,000. The significant increase in x402’s transaction activity aligns with the forecast made by a16z’s crypto arm in its 2025 State of Crypto report. The tech-centered venture capital firm predicted that autonomous transactions could potentially reach a turnover of $30 trillion by the year 2030.

The integration of AI and x402

Notably, AI agents play a crucial role in this astronomical rise of x402 transactions. Without the need to intervene humanly in the management of API calls, storage, computation, and more, AI agents have allowed for a variety of different implementations of these autonomous transactions. For instance, stablecoins can facilitate self-driving taxis to cover their expenses, or apps can automatically use them for permanent data storage. These AI agents are gradually proving to be adept at not only executing purchase or sell orders but also at evaluating market data and continually fine-tuning portfolios, all without any human interference. Consequently, the use of x402’s design is scaling rapidly for launching tokens directly – a trend that has sparked a wave of x402-powered memecoin launches.

The impact of x402’s growth

Due to its expansion, CoinGecko – a platform for tracking cryptocurrencies and other digital assets – has begun tracking x402 tokens as part of a new ecosystem which has now transformed into an almost $180 million market, boasting an impressive 266% growth in just the last 24 hours.

Fostering efficiency with Ethereum

Ethereum and stablecoins are integral components of HTTP 402 implementations. Interactions between these components have allowed making invoices and dispute chargebacks a foolproof process, significantly more efficient than traditional processes that are used commonly. As developers Lincoln Murr and Kevin Leffew from Coinbase’s development team pointed out in August, Ethereum’s trustless settlement layer makes it the ideal blockchain for HTTP 402 implementation – with Ethereum and stablecoins, atomic payments, programmable policies, and composable wallets are no longer an issue. To sum up, the rise of x402 is a testament to the budding intersection of technology and finance, fueled by the potential of AI and the innovation of cryptocurrency enterprise Coinbase. As adoption continues to grow, and AI further engrained in everyday transactions, the future of online payments is set to see an unprecedented shift towards autonomy and efficiency.

Coinbase’s x402 Protocol Sees 10,000% Increase in Stablecoin Transactions, Fueling New Ecosystem and High Blockchain Efficiency