"CT Chinese · Crypto Circle Open Mic" is a monthly audio interview program created by Cointelegraph's Chinese site, held every two weeks. The show invites core practitioners and observers from various fields such as blockchain, Web3, DeFi, stablecoins, the Ethereum ecosystem, and policy regulation to enter the studio and discuss industry hotspots, market dynamics, and in-depth viewpoints. In a relaxed and open dialogue atmosphere, it presents a more authentic, diverse, and cutting-edge crypto world to the audience.
This episode's theme is: x402: Unlocking the AI Money Flow Revolution in the Era of Internet-Native Payments
Our invited guests include:
Anita, the GTM business leader from Sentient APAC,
JT Song, the Asia-Pacific head of the 0G project,
Jesse, the COO of the Xhunt platform,
and two well-known KOLs from the Chinese community: HaoTian and Aster.
(The audio transcription has been processed by AI, with some content edited and modified. For the complete audio, please visit the X platform to listen.)
Host Eva: Hello everyone, welcome to tonight's CT Chinese Crypto Circle Open Mic program. Tonight's AMA theme is: "x402: Unlocking the AI Money Flow Revolution in the Era of Internet-Native Payments." I am your host Eva, and I am very honored to join you in this in-depth dialogue focusing on the next generation of internet payment infrastructure.
In the past few years, we have witnessed the emergence of hot topics such as blockchain, tokens, DeFi, and even AI agents. However, looking back, we find that while the internet has long connected information, it still lacks a truly native, low-friction, globally universal payment layer. The x402 protocol has emerged to address this: by reactivating the HTTP status code 402 ("Payment Required"), it provides a capability for "embedded value transfer" for web pages, APIs, AI agent services, and more.
Recent data shows that x402 is also showing signs of rapid expansion in the market. So tonight, we will delve into multiple dimensions with our guests, including technical design, business logic, ecological implementation, compliance governance, and milestone indicators: what does x402 really mean? How can we participate? What challenges will we face?
Today, we have five guests for this AMA: Anita, the GTM business leader from Sentient APAC; JT Song, the Asia-Pacific head of the 0G project; Jesse, the COO of the Xhunt platform; and two well-known KOLs from the Chinese community: HaoTian and Aster.
First, I would like to thank all the guests for taking the time to participate today. Before we officially start, let's have everyone greet our audience. Let's start with Anita.
Anita:
I am Anita, the GTM leader from Sentient APAC. Sentient is currently busy with various global online and offline events. I believe if you have been following AI, you shouldn't have missed us at Sentient. Thank you to Cointelegraph Chinese for inviting me to participate in this AMA about x402.
JT Song:
I am JT, the Asia-Pacific head of 0G Labs. 0G is also a public chain for AI, primarily focused on decentralized AI infrastructure. Our mainnet officially launched on September 22, and we completed our TGE at the same time. 0G is currently working from first principles to provide a comprehensive solution for all decentralized AI. In addition to on-chain activities, the storage of AI data, computing power, and the entire process of AI training and fine-tuning can all be completed in one-stop using our infrastructure within the 0G ecosystem. After the mainnet launch, we are also focusing on building new showcases and viable projects, so we welcome everyone to come and build using our infrastructure at 0G.
Jesse:
I am Jesse from Xhunt. Xhunt is an AI assistant and KOLFi platform for web3 creators. Xhunt provides transparent KOL data, metrics, real-time project research analysis, and an efficient marketing collaboration platform. We are dedicated to helping project parties connect with trusted KOLs to achieve precise communication and verifiable growth. We also welcome everyone to use our Xhunt plugin and participate in our upcoming KOLFi event.
Aster:
Hello everyone, I am Aster, an early entrant in the crypto space. On one hand, I am an experienced trader, and on the other hand, I have been working in exchanges for many years and am currently employed at a certain exchange. I am very pleased to be invited to discuss x402, a very hot topic recently.
Haotian:
Hello everyone, I am Haotian. I am an independent researcher, currently an advisor at Amber Group, and I am also conducting research in some vertical industries. I am mainly focused on promoting the x402 track.
Host Eva:
Our first question is: What are the fundamental advantages and security challenges of introducing HTTP 402 into the payment flow in x402 compared to traditional on-chain payments (such as direct wallet transfers or L2 acquisitions)? Why is it said that x402 and ERC8004 are actually very complementary protocols for the future AI machine economy?
We would like to ask Jesse and GT to answer this question, and we also want GT to specifically address how the infrastructure built by 0G can provide comprehensive support for both.
Let's start with Jesse.
Jesse:
I believe x402 has three fundamental advantages compared to the on-chain payments we currently use. First, it offers instant settlement and very low costs. For the payment methods we are familiar with, we need to wait for block confirmations and pay certain gas fees. However, x402 allows us to complete settlements directly at the HTTP layer, with speeds as fast as card swipes and very low fees. Therefore, it is very suitable for high-frequency, small-amount payments.
Additionally, it is a chain-agnostic and highly embedded protocol. There are many specific blockchains on the current blockchain, making cross-chain operations very cumbersome. x402 can be seamlessly integrated into web pages or APIs, so users may not need to understand complex wallet operations.
The third advantage is that x402 is naturally suited for the machine economy. x402 is actually born for the AI era and the robot era. It supports automatic micropayments, enabling AI to automatically purchase computing power data or call APIs, making it a reality for machines to earn and spend money. As for its challenges, since this technology is relatively new, improper integration may lead to phishing issues.
x402 and ERC-8004 are complementary because ERC-8004 is a new standard for trustless agent design on Ethereum, essentially providing a digital identity for our AI agents, allowing different companies or agents to conduct secure identification verification and writing. In other words, x402 can solve the payment issue for AI agents, while ERC-8004 addresses the trust issue, allowing us to decide whether to trust you. The combination of the two enables AI to autonomously trade and collaborate on the internet. That's my share, thank you.
GT Song:
I believe the emergence of 402 is a significant advancement in the integration of AI and payments. x402, along with 8004 and a new standard we are building at 0G called ERC-7857, together form a complete logic for on-chain AI payments.
Let me briefly explain the roles of these different standards. x402—if we understand it in terms of traditional economic or financial payment models—can be likened to a bank card and a POS machine, representing a payment model between AI and AI. With this infrastructure, AI can work together. However, ERC-8004 addresses the identity issue of AI agents, ensuring that the AI agent behind the POS machine or credit card is indeed capable of providing the service. So, 8004 essentially gives you a trusted identity for AI, facilitating the verification of services after payment.
ERC-7857 is about the on-chain and assetization of AI agents, allowing AI agents to become on-chain assets while also protecting the privacy of the data during this process. In simple terms, it ensures that the underlying large models and data of AI agents are protected during training and payment.
Therefore, I believe that the combination of the three constitutes a complete economic system for AI agents. Using traditional finance as an example, there is a payment interface, a trust mechanism for payments, and during the payment process, we can protect the privacy and intellectual property of AI agents. It prevents all on-chain or AI data from being completely exposed without protection, creating a very organic and cohesive whole.
I think we are still in the process of gradually establishing this infrastructure, and there are still many real-world cases being built, with a long way to go.
Host Eva: "How does the instant settlement and 'no registration' model of x402 achieve compliance? What specific compliance responsibilities do facilitators in the ecosystem (such as Coinbase) bear? We would like to ask Haotian and Jesse to answer this question.
Haotian:
It's actually quite simple. To solve compliance issues, you first need to consider where the compliance attributes should be integrated. Currently, I see that facilitators can incorporate this layer of responsibility when they handle settlements. Since facilitators are centralized, as everyone knows, their current responsibilities include packaging transactions, helping with basic wallet configurations, and broadcasting to the blockchain. In simple terms, they handle some mundane tasks. At present, these responsibilities may seem straightforward, but in the future, you can add many elements to them. In my understanding, facilitators are essentially the super nodes within the blockchain, capable of performing many enhancements. After enhancement, they can provide various suspicious transaction information reports to regulatory agencies, while also offering necessary privacy to users. It embodies a dualistic property. I believe the future lies in expanding the overall functionality of facilitators, but for now, it is quite simple—just a matter of paying gas fees and synchronizing states. Currently, core players like Coinbase CDP still operate on a subsidized model and have not yet resolved their revenue issues. In simple terms, some facilitators have issued tokens but have not addressed the empowerment issue. I believe this is a small branch of the x402 ecosystem, which may have significant expansion potential, but for now, it is truly just the beginning.
Host Eva:
The third question is: For developers/companies looking to integrate x402 into their products, what are the estimated costs, integration times, and operational complexities? What common implementation pitfalls or performance bottlenecks should be noted? Let's have Aster and Haotian answer this question.
Aster:
If you want to develop x402, the first step is a choice: whether to build this facilitator yourself or use a third party. You have two options. The first is to use an existing third-party settlement provider, like Coinbase. If you use their services, you only need to connect to their API. After integrating their API, the cost will be the service fees you pay them, which will definitely speed up the process. Based on the mature API integration available now, I estimate that a team could connect this part within a month, or even a few weeks if the backend team is very experienced. The main costs here will be transaction fees and service fees for third-party settlement providers like Coinbase.
The other option is to build everything from scratch. If you decide to create a new third-party settlement provider, you will need to handle everything yourself, including signing, constructing on-chain transactions, compliance channels, and fiat settlement channels. The advantage of this approach is that you have complete control and do not need to pay service fees to a third party. However, this will definitely extend the overall construction time, starting from at least a few months. Given the current development speed in web3, I estimate it will take at least 1-2 quarters to complete this self-construction. However, third-party settlement providers are still a relatively new field, with only two or three players currently, including Coinbase. If some teams want to share in this market, joining while the entire x402 ecosystem is still in its early stages to become one of the third-party settlement providers is also a good choice.
Several common issues may arise. As a protocol designed for efficient and high-frequency payments, it is prone to refund and dispute issues. Therefore, anyone providing such services and developers must carefully consider how to design the on-chain evidence chain and how to handle these issues. This is based on my discussions with some industry developers.
Haotian:
First of all, I believe that the x402 protocol, being an open-source protocol, can vary greatly in complexity. If you want to keep it simple, you can directly work within the Base ecosystem, which has already paved the way for you with its native USDC, EIP-3009 one-time authorization, and various related applications. Overall, it is a complete system. However, if you want to make x402 compatible with other chains, it becomes relatively complex. The complexity arises because the core of x402, EIP-3009, is currently only native to Base. If you want to be compatible with EIP-3009 on other chains, it can be quite troublesome and requires many transitions. So overall, I think the complexity is still significant, but there are many solutions. The key is that the x402 protocol is currently just an open-source protocol, and many aspects are not fully developed, requiring collaboration with the entire ecosystem to fill the gaps. It is not a standardized solution, so for many developers wanting to integrate x402, they need to adapt to its SDK, which involves a lot of preliminary development work to ensure compatibility with different chains, leading to high costs. In the future, there may be improvements from the Base ecosystem or some relay chains to address this issue, which is a possibility.
Another bottleneck is the performance bottleneck, specifically the processing capacity of facilitators. Since they are currently centralized, there are transparency issues during processing. To increase their processing capacity, you must empower them significantly, which involves exploring the facilitators' own processing capabilities.
Host Eva:
According to reported data, the payment volume processed by x402 facilitators has surpassed $10 million. What are the main use cases for these transactions? We would like to ask Anita and Aster to help us interpret this question.
Anita:
The payment volume exceeding $10 million for our facilitators is, of course, based on the demand for payments. Traditional payment settlements require banks, cross-border e-commerce, and intermediaries to complete a lengthy payment process. In contrast, x402 can handle low-cost, high-frequency transactions in micropayment and high-frequency trading scenarios, while also integrating blockchain technology. Its instant settlement mechanism will enable cross-border e-commerce, content creation, and even gaming to achieve efficient payment and subscription models that traditional financial systems cannot cover.
For new end users like us, we can use this protocol to create a good closed loop from content creation to payment and then back to re-creation. All of this can be derived through our x402 protocol. Additionally, for low-value and high-frequency payment needs that credit cards cannot meet, x402 can perfectly replace them. On this protocol, we can also provide very good complete payment and consumption scenarios. I believe that finding ways to utilize x402 to reduce communication costs and enable global users to achieve an ideal middle ground in converting between different tokens or between fiat and tokens, thus completing a perfect settlement payment, is also the future direction of x402.
I think x402 provides an open space for any scenario related to transactions or settlements, offering many opportunities and imaginative possibilities for crypto entrepreneurs.
Aster:
Let me first mention this data. About a week ago, I saw a report stating that x402 had processed over $2 million in the past 30 days, and just a week later, today, the data has already exceeded $10 million. This indicates that the ecosystem is indeed thriving during this period.
Currently, its main use cases are still in three directions. The first direction is the most familiar: AI agents, including transactions between AI agents, data payments, and content payments, which are currently the most common use cases. Another area includes image generation, retrieval services, and query services, which involve paid content usage. The third point is that tokens like memecoins have brought new attention and traffic through their breakout effects, and these breakout applications driven by memecoins have become one of the typical use cases for x402.
Host Eva:
As we have seen, the transaction volume of x402 is growing rapidly. Next, as more tokens/services are quickly released and traded through x402, how can the community prevent fraud, spam tokens, and economic manipulation?
GT Song:
The key is still to have a comprehensive supporting system. This is why many people are linking 402 with 8004, because 402 only addresses the payment process. However, whether the person I pay can fulfill the service I need or whether they are qualified to receive my payment requires 8004 to complete. But 8004 also involves a problem: it can only solve the on-chain identity issue of AI agents. We can only verify through 8004 that they have the business or ID. However, whether they actually fulfill their obligations or whether the underlying data can deliver everything is something that needs to be combined with what we are currently doing with 0G's ERC-7857. Therefore, I believe that 402 is still in a very preliminary stage.
In theory, on the blockchain, within the 0G ecosystem, we can use 7857 to confirm whether there is cheating and whether it is fair. However, in the process of confirming this fairness and compliance, I do not need to show you the entire process; I can simply verify it through algorithms. So, when the entire process is combined, it can ensure that fraud does not occur. If we only have 402 or 8004, we can only confirm that the transaction process is completed, but if all the data behind the transaction is processed on centralized servers, we still have not solved the transparency and verifiability issues we mentioned regarding AI. This is the logic behind our overall supporting system, which is why we at 0G are designing a full-chain AI infrastructure.
Anita:
Let me mention a few scenarios. I believe that at various stages, including smart contracts, you can set up some good monitoring systems. Of course, we can also leverage third-party professional institutions, such as security audits, to ensure that our entire smart contract scheduling meets user security requirements. Additionally, there are challenges at the community level. I think at the community level, we can utilize a reputation and rating system. If a token issuer lacks credibility, it could pose significant risks to the entire ecosystem. Therefore, our solution may need to design a token reputation system based on the issuer's historical records or community evaluations, conducting on-chain transparent assessments and an overall security rating system, and leveraging common risk assessments, including community voting mechanisms, to prevent undesirable tokens, market manipulation, and risks. This way, we can supervise each other through community efforts, preventing potential risks at a multi-node level.
Additionally, we will have a better governance mechanism. This may involve our community users voting to decide on the listing and delisting of tokens, as well as inserting review votes within the internal operations of the project or the entire mechanism to prevent abuse by individual participants.
Host Eva: Our next question is to understand what the key success indicators (KPIs) for x402 are. In your view, what milestones would prove that x402 has become the 'internet-native payment standard'?
Anita:
From an ecological perspective, it may be necessary to look at the support from developer technology. While 402 is a good protocol, to fully integrate it into the market or ecosystem, it needs to be segmented across different scenarios, including how to manage security compliance and risk control, as well as how we can differentiate in various consumption and application scenarios. These are very specific topics. When we have enough native developers for a particular consumption or payment scenario to build such a product or ecosystem on the protocol, I think that is a good ecological indicator from a developer dimension.
On top of that, how we utilize x402 to create a standardized global financial payment system will require overcoming challenges such as protocol and asset swaps between chains, including the number and depth of cross-chain supported currencies and platforms, as well as compatibility with mainstream payment networks. If traditional payment methods, such as VISA and Mastercard, can also be directly integrated into our x402, then our overall mass adoption will be significantly enhanced.
Another good aspiration is that we can use x402 without awareness. Users should not need to learn what x402 is, nor understand the payment process or the underlying technology, but should be able to complete the entire process smoothly. This requires all developers and ecosystem contributors using blockchain networks to achieve a unified standard. When our users can seamlessly enter this ecosystem without awareness and integrate it into their daily lives, I believe that will represent the most perfect adoption of the x402 ecosystem.
GT Song:
In simple terms, the milestone or KPI for its application is not about how many people are paying attention to x402, but rather how many AIs are actually settling through x402 during the AI inter-settlement process. I think this is a critical standard. If the collaboration and communication between AI agents can be settled through x402, that should be considered a preliminary mass adoption.
Host Eva:
Thank you once again to all the guests for your wonderful sharing. Tonight, we explored the highly promising payment protocol x402, covering everything from technical principles, integration costs, ecological governance to standardization pathways.
The future internet may not just be an era of "information flow," but rather an era of "value transfer," with paths full of expectations and challenges. I hope tonight's discussion can provide practical insights for developers, investors, and community members engaged in AI, Web3, payments, and intelligent agent-related projects.
Related: Why has the x402 protocol not fallen silent after the PING craze subsided? Where does the second wave of upward momentum come from?
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