Coinbase’s x402 AI Payments Protocol Experiences a 10,000% Surge in Activity

Coinbase’s x402 AI Payments Protocol Experiences a 10,000% Surge in Activity

Coinbase’s innovative x402 payments protocol, designed to permit both AI agents and humans to make direct payments in stablecoins via the internet, has witnessed a tremendous increase in activity.

Key Takeaways

The x402 protocol by Coinbase has experienced an astonishing 10,000% increase in transactions, processing nearly 500,000 payments in just one week.
This protocol takes advantage of the long-dormant HTTP 402 "Payment Required" status code to facilitate immediate on-chain payments using stablecoins.
A surge in developer interest has led to the launch of new tokens powered by the x402 framework.

As per data collected from Dune Analytics, the payment protocol has seen a phenomenal increase in transactions exceeding 10,000% over the last month.

Coinbase’s x402: Reviving HTTP 402 for Instant On-Chain Payments

Introduced in May, the x402 protocol transforms the rarely used HTTP 402 status code of "Payment Required" into a new native payment layer on the internet.

This innovation allows for automatic, real-time transactions that do not rely on credit cards or intermediaries.

Users or AI agents can initiate a service request, receive a prompt for a 402 payment, and then send a verified stablecoin payment on-chain.

Between October 14 and 20, the protocol processed close to 500,000 transactions, reflecting a staggering increase of 10,780% from the month before.

Activity peaked on a Friday with 239,505 transactions logged, while Thursday's volume reached an impressive $332,000.

This dramatic rise in activity coincides with increased interest in "agentic AI," autonomous AI systems designed to manage finances and resources. This trend was highlighted in a16z Crypto’s 2025 State of Crypto report, which forecasts these agents may facilitate up to $30 trillion in autonomous transactions by the year 2030.

Coinbase developers Kevin Leffew and Lincoln Murr explained in August that x402 could create a new financial layer for digital agents, allowing them to pay for computing, storage, or even transportation without any human intervention.

“They require atomic payments, programmable policies, and composable wallets,” they remarked. “Ethereum and stablecoins provide precisely that.”

Moreover, developers have started employing the x402 framework for launching new tokens, which has led to a wave of fresh x402-powered memecoin projects, as reported by KuCoin Ventures.

The momentum of this trend was robust enough for CoinGecko to create a new category for “x402 tokens,” which has rapidly grown to a market size of $180 million, achieving a 266% increase within just 24 hours.

This new protocol from Coinbase highlights a significant movement towards merging AI capabilities with on-chain finance, enabling machines to autonomously conduct payments and manage data without third-party involvement.

If adoption continues at this rapid pace, x402 could establish itself as the first functional link between AI systems and blockchain-driven economic activities—a critical progression that Coinbase has referred to as “correcting the internet’s foundational error.”

Coinbase Under Scrutiny Following AI Coding Tool Vulnerability

Last month, a security exploit in Cursor, an AI-driven coding assistant reportedly used by all engineers at Coinbase, raised serious alarms within both the cryptocurrency and cybersecurity sectors.

Known as the “CopyPasta License Attack,” this vulnerability was uncovered by cybersecurity company HiddenLayer. It enables hackers to insert concealed markdown instructions that can spread malware through developer files like README.md and LICENSE.txt.

Once activated, this attack can jeopardize entire codebases with minimal effort from the user.

HiddenLayer showcased how this vulnerability could stealthily inject harmful code capable of stealing sensitive information, creating backdoors, or modifying essential systems.

The firm indicated that similar threats exist within other AI coding tools such as Windsurf, Kiro, and Aider. This revelation followed shortly after Coinbase CEO Brian Armstrong disclosed that AI is responsible for writing up to 40% of the company’s code, with intentions to increase that share to 50%.

Critics, including developers and academics, have voiced concerns that Coinbase's rapid implementation of AI technologies could pose risks to user assets and essential infrastructure.