x402 and the Rise of Internet Native Stablecoin AI Payments | Erik Reppel - x402

Hello. Can everybody hear me? Yeah, that sounds right. Um so, I'm Eric. I'm the head of engineering for Coinbase developer platform.

I'm also the creator of X402. My talk had a big long title that I refactored recently, so apologies to the organizers. Um I'm going to talk a bit about the rise of the agentic internet and X402 and 804 and beyond. So, I have this context. For context, I think no one would question that AI is pushing us to an inflection point.

And my belief is that in the coming years the coming years will dictate the next few decades of how the internet operates. And we're at a point where we can choose open or we can choose closed. And I think the default path is closed, and I think that crypto is uniquely suited as the basis for an open path for agentic for an agentic internet. And so, how how how did we get here? We all use the internet every day.

I don't think a lot of many people think through how the internet got to the state that it currently is. And way way back in the '70s, there was this project called the World Wide Web, which came out of CERN labs. Uh it was the like OG internet. And what was it? It was the HTTP spec, the HTML spec, and then what they called at the time a WWW client, what we now know as a a what we now know as a browser.

And really what these were were standards for computer computers to communicate with each other to display information to humans. And then this was kind of web 1.0, the read era of the internet with academics using it to share papers and information. And then uh we got web 2. That's the write era of the internet.

We got JavaScript, Ajax, JSON, again more standards. Each one of these has a purpose, format, transport, and delivery for a browser, interaction, access, and a formats for lighter data exchange with JavaScript, Ajax, and JSON. But broadly, my point here is the web evolves through standards. And one way to think about really any product or thing that exists is an axis of value created versus value captured. And you you can kind of think of things as like things that create a lot of value but don't capture very much are likely standards.

Things that create a lot of value and capture a lot of value are usually companies. Things that create no value and capture no value are irrelevant, and then things that capture a ton of value but don't create very much are either shitty companies or extractive. And so, HTML alone, if it existed in a vacuum, is very low value capture and very low value created. HTML plus the consensus that everyone's going to use HTML to declare how web pages work is much much higher value. Uh and then the full suite of web standards plus the consensus of those standards is extremely high value created.

And that's because everyone agrees upon it. You now have a solid foundation for everyone to build internet things that talk to each other, and you don't have need to go download a browser, an application per website. Chrome works with everything, Safari works with everything. They're completely different implementations of the same standards. And so, some people may not remember there this was not the anointed path.

The internet started in earnest in consumer usage with AOL. AOL was how most people used the computer network to another computer for the first time. Netscape and the World Wide Web were really the alternative to AOL, and AOL had a big lead. And but AOL is a walled garden. It was curated.

It was orderly. The World Wide Web was open. Anybody Anyone could spin up a server. It was indexed. You had companies like Yahoo, Google, Jeeves, etc.

And it was chaotic because anyone could publish to it. And if you think about this value captured versus created graph, the World Wide Web as a standards body created so so much value. You could argue that they're the biggest value creating entity of the last 100 years. AOL was more focused on capturing value, and so it created some value, but it it didn't it isn't around today because ultimately open one. And I think once you when you have these walled gardens, you can look back in retrospective open one because more flowers bloomed outside the garden than within it.

And so, let's let's take a complete pivot to to today. So, agents, what are we? This is the this is the interactive portion of my talk. Put your hand up if you think ChatGPT is an agent. No hands.

Is Claude Code an agent? Couple hands, a smattering of them. Is Open Claw an agent? Many more hands, again. I don't think there's consensus on what an agent is right now, and so I'd like to propose a definition.

An agent is intelligent, personalized, capable background compute. And so, if you think about that matrix of those three products, ChatGPT, intelligent, not personalized until recent versions, not super capable cuz it didn't have skills. It could tell you stuff, but it couldn't do stuff for you. Doesn't run in the background. ChatGPT 5.

2 starts to get personalized. Claude Code, intelligent, personalized, capable. It can write code, it can edit files, it can do stuff on your behalf. Uh and Open Claw, all those things, but it can run in the background, right? And so, what what do you actually want an agent to be able to do?

You want it to be able to take things off your plate. It's You want it to be able to help you be more productive. You want it to entertain you. You want it to make your life more convenient. I would point out that these are all things a browser does with you in the loop.

Like browsers and agents in many ways are just the browser of the future. And so, this is why it's so important for us to be working on standards for these agents. It's cuz we're building a new browser accidentally. And so, maybe we should be intentional about what those agents how those agents communicate, what standards are those things built on. Or we're going to end up in the AOL-ification of agents.

So, what what does this mean? Well, we started with web 1, web 2. I'm not going to do a like, "Oh, it's web 3 now." thing. Um but what I will say is that as we move towards the agentic web, we need to be intentional about standards and building standards like HTTP, HTML, CSS, what they did for web 1.

0 and 2.0, we need to do that for the agentic web. And so, you have X402, which I'm I authored, uh that is for payments. You have UCP and ACP that are for more e-commerce checkout-based flows. You have 804 for discovery and reputation.

You have markdown that's now become the de facto way of formatting for agents. You have skill/MCP for tool use. You have sign-in with X or 8128 for authentication. We're starting to get a good ecosystem of these standards up that kind of provide the features that agents will need in order to securely identify themselves, talk to each other, pay for things, and broadly be actors on the internet. And so, let's let's talk about X402 a little bit.

Um I created X402 largely over a weekend about a about a month a year plus a half month ago. That was really X402 1.0. V1. Had a ton of help over that time.

Many people to shout out. John Peterson, Carson, Kevin LaFew, many others. Um but what is X402? We have By the way, we actually first started showing people X402 to people at ETHDenver exactly a year ago. So, last ETHDenver, a handful of people saw X402 in the very very early days.

X402 is an open standard for internet-native payments. What that means is that the payments are can be included in the requests your browser or your agents or your script are already making to an existing server. Supports multiple chains. It supports multiple tokens. It's sim designed to start simple and then layer on complexity.

I think a lot of what you see with payments is a relic of how payments have been done, but they aren't needed from first principles. Some things are needed, so you want to be able to gracefully add to the standard. And then it's uniquely suited for agentic payments. And one of the nice features that I think is underappreciated in X402 is that it's really the checkout POC for the internet. And that if you go up to a cash register, they probably have a sticker that looks something like this where it says, "We accept Visa, MasterCard, Discover, Amex, Apple Pay."

X402 allows you to represent the same thing. X402 doesn't force you into one chain. You can say, "Hey, I accept USDC on Base or USDT on Ethereum or USDC on Solana or DAI on Arbitrum." Like you can really compose as a merchant many different ways of receiving payment, and then the client just chooses what they are best equipped to pay you with. Similarly to how you as a consumer pull a card out of your wallet, and sometimes you want to put it on your Chase card, sometimes you want to pay with stablecoins, sometimes you want to put it on your on your on your Visa.

X402 comes with multiple layers, and so this is a diagram that is if anyone's familiar with the uh seven layers of an OSI stack. This is the equivalent for X402. You have the application, which is the buyers and the sellers of an X402 of X402. You have the declaration, which is the format the information X402 transmits, how it is structured. You have transport, you have scheme, you have network, you have asset, and you have mechanisms.

And the X402 having this kind of architecture of layering allows you to make a lot of modifications to how X402 works in order to natively integrate it into different methods. And so, an example of this is uh X402 natively supports MCP as a transport. And so, if you have an MCP service, you can actually have a an agent and a tool communicate payment as part of the MCP messages uh in a fully native way that both sides will understand. And you can you can do the same with A2A, or you can you can do the same with any other way that two computers may talk to each other. And so, I got 4 minutes left, which means I might have time for some demos, but I'll give you my final thoughts.

If we want the agentic web to be open, we need open standards. If we don't follow this path, we're going to end up in the AOL world, not the World Wide Web world. I think I'm hoping that 10 years from now we'll look back and think open one because more flowers bloomed outside the garden than within it. And so, all of us contribute to that. I think crypto as an ethos is uniquely positioned as kind of the current forebear of open, decentralized, trustless standards that all work together uh to really push forward.

The technology is also uniquely suited for the kind of instant payments, settlements, reputation, discoverability that agents are going to need without having one singular player dominate the entire space. So, if you want to learn more, x402.org. Um if you want to read the code, github.com/coinbase/x402, or if you want to start selling stuff with X402, check out the CDP docs.

We have a facilitator, it means that you don't need to do any crypto stuff in order to accept payments with stablecoins. Um and if you want to follow me, I'm @programmeronx. Um that's all I got. Does anyone want to see a Okay. Clap clap.

Would anyone like to see an X402 transaction? Yeah. All right. Um so, we released the product last week called AWall, the agentic wallet. Um the Okay, I'm showing.

Let's Let's zoom in a little. So, AWall is a wallet that is accessible via CLI, which means that it's really easy for an agent to use. Um and so, if I do NPX AWall help, I get a full wallet. And I can do NPX AWall sends uh 50 cents to eric.eth.

It's going to not like my bash quote cuz I didn't read the skill.md that we ship with this. And so, I've sent myself uh 50 cents. Boom. Now uh let's let's pay for something with X402.

So, I'm going to use a example I gave earlier. This is an API that gives stock data. Um what it's doing is just making a post request to this API with an X402 payment attached, and uh I've paid for this piece of data. And so, here's the data. Here are the headers.

Here's the transaction on chain that I can go check. And what is really cool is now your agent can do all these things. And so, I'm not connected to VPN, so I won't be able to get tokens, but uh your agent can now search, pay for, send, trade, all the verbs um fully autonomously. Uh right now it's base only, we'll add more chains later. Um and then for the first time we added a search capability to uh the bazaar of X402, which is the marketplace.

And so, if I search image generation, I can see a bunch of different tools that uh offer image generation. And so, if you have a product or service that's X402 enabled and you use the CDP facilitator, it should be available in the search index. So, this all works today. You can do the real transactions with X402 for real services that provide value to your agents and unlock new capabilities right now. So, highly recommend building something and uh yeah.

That's Now, that's actually all I got. Thanks for having me.

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