Based on TechFlow, the x402 protocol, jointly launched by Coinbase and Cloudflare in 2025, aims to activate the long-dormant HTTP 402 status code to create a native payment layer for the internet. Built on blockchain and stablecoins, the protocol enables low-cost, instant settlement, and chain-agnostic architecture, particularly suitable for high-frequency, automated micro-payments in AI agent economies. It offers unique advantages such as 'payment as settlement,' HTTP-native integration, and minimal onboarding, supported by partners like Visa, Google, and Anthropic. The protocol seeks to shift internet business models from ad-based and subscription-based to value-driven, while also addressing limitations in traditional payment systems like high fees, settlement delays, and cross-border barriers. Risks include scalability, regulatory uncertainty, and user adoption challenges.
x402 Protocol Aims to Build Native Internet Payment Layer with Coinbase and Cloudflare
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