Understanding of the X402 Protocol

The entire weekend, there has been a heated discussion online about Coinbase's X402 protocol.

One important factor that has sparked interest in this protocol is the creation of a meme coin called PING.

I shared about the X402 protocol in my article last week. It is a payment protocol initiated by Coinbase with the participation of numerous institutions.

After the release of this protocol, despite the abundance of promotional articles, there have not been many practical cases of implementation. It wasn't until October 23, when the first token PING was created, that people began to pay more attention to its actual operation.

How is this PING token generated?

In brief, users can open the X402 protocol browser page (https://www.x402scan.com/), log into the Base network using an Ethereum wallet, and send 1 USDC to a URL "https://api.ping.observer/ping" to mint 5000 PING tokens.

(Of course, if readers try this operation on the website now, they will no longer be able to exchange for PING.)

In this process, the X402 protocol is used to accept payments for minting tokens, but this does not mean that the protocol can only be used for minting tokens; in fact, it can be used to pay for any service and is a universal payment protocol.

This case demonstrates that users can pay for internet applications with crypto assets through this protocol, and once the payment is verified, users can receive service feedback (in this case, they received tokens).

The entire process showcases the complete workflow of the X402 protocol and proves the feasibility of the protocol.

However, upon closer inspection, it seems that this protocol has a weakness: after users complete the payment, there is no enforced process to ensure that the merchant will definitely provide the service. In other words, if the merchant does not provide the service, users are powerless. This is a significant gap compared to the initial ICOs, which used smart contracts to enforce service delivery.

This shortcoming should be addressed with more technology in future implementations.

Currently, besides the PING token application, there are a series of other applications using the X402 protocol. Users can log into the X402 protocol browser (https://www.x402scan.com/) to check them out.

On the page, the "Top Servers" section lists all internet applications that utilize the protocol for payment transactions, ranked by transaction volume. Some well-known AI applications/AI Agents are prominently featured, such as questflow.ai, heurist.ai, and itsgloria.ai.

Clearly, these applications are beginning to frequently experiment with the X402 protocol.

If the X402 protocol can indeed be rapidly promoted and applied, the leading effect of PING will be very obvious—many users are clearly betting on this prospect, which is why PING surged shortly after its launch.

Whether to buy this token now is still a matter for everyone to think independently and judge for themselves.

For more information about the PING token and X402, Blockchain Pulse has published a detailed article (full text can be found in the reference link at the end of this article).

In this article, the author also lists some AI Agents projects closely related to X402. Many of these projects are AI Agents in the Virtual ecosystem.

In addition to these projects, the article compares the PING token to the Bitcoin inscriptions of the past, suggesting that the minting process of PING is very similar to the inscriptions, and thus the popularity of X402 may replicate that of the inscriptions.

From a technical perspective, there are indeed similarities between the two. However, due to different contexts and consensus, whether it can replicate the past popularity of the inscriptions remains to be seen over time.

However, since the technology is similar, and given the current crypto ecosystem is severely lacking in new narratives and gimmicks, it is a bold guess that many teams will rush to this protocol to mint various "gimmicky" assets.

In fact, what I look forward to the most is for more internet applications to integrate their services with X402, allowing users to pay with crypto assets to access their services.

This would be a tremendous boon for users in certain regions where internet usage is heavily restricted and where payments in USD are not possible.