Why Has the x402 Protocol Not Fizzled Out?

Nearly a week has passed since the x402 protocol set the market abuzz with the explosive success of the meme coin $PING. To date, most market sentiment remains positive, with both optimistic outlooks for x402’s future and detailed discussions of various projects. However, some voices caution that x402’s meteoric rise may struggle to meet overheated market expectations in the short term, potentially leading to a loss of momentum.

So, what changes have unfolded in the x402 protocol ecosystem over the past week? By reviewing and analyzing the developments within the x402 ecosystem during this period, we can address the question posed in the article’s title.

Market Enthusiasm Remains Unabated

No matter how the market interprets $PING’s rapid surge, it has undeniably brought the x402 protocol to the forefront among crypto participants. Before $PING’s rally, 30-day data from the x402 ecosystem showed that the $PING minting interface processed over 150,000 x402 transactions, totaling roughly $140,000—far ahead of second-place Questflow, which saw only 24,800 transactions and less than $1,400 in volume.

Now, just 24 hours of data have already far surpassed the previous 30-day totals. In the past 24 hours, the top 10 most active services received about 280,000 transactions—twice the previous 30-day figure. Transaction volume reached approximately $246,000, again double the earlier 30-day total.

Clearly, the x402 protocol is far from a fleeting phenomenon; it continues to enjoy strong market support.

Speculation Shifts from Meme Coins to Applications

As the first meme coin launched on the x402 protocol, $PING was, at the height of FOMO, frequently compared to $ORDI—the inaugural token of the BRC-20 protocol. However, after briefly surpassing an $80 million market cap, $PING failed to sustain its momentum and has since corrected to around $29 million.

Meme coins are driven by market sentiment. After OKX CEO Star posted a tweet featuring a $PING screenshot, there was a short-term lull in sentiment-fueling tweets, making $PING’s correction unsurprising.

Unlike inscription asset protocols such as BRC-20, x402 was designed from the ground up to support payments and AI Agents. As a result, user enthusiasm and capital didn’t exit the x402 ecosystem—they shifted to application tokens within x402’s ecosystem.

$PAYAI has quickly taken the lead as the new flagship token of the x402 protocol. Yesterday, $PAYAI’s market cap briefly exceeded $76 million, marking a twelvefold increase since October 24. It has since pulled back to about $53 million.

This is primarily due to two factors. Most importantly, PayAI is currently the second-largest Facilitator (on-chain verification and settlement service provider) in the ecosystem, after Coinbase:

PayAI has now processed over 14% of x402 transactions, making it the largest Facilitator by transaction count after Coinbase.

Additionally, PayAI founder Notorious ranks seventh among contributors on the official x402 protocol Github, which many interpret as evidence of a close connection between the project and the x402 protocol itself.

Other ecosystem tokens, such as $dreams and $SANTA, have also posted impressive gains. For a deeper dive into these ecosystem projects, see BlockBeats’ recent article, “The 30x Inscription Gold Dog: What Is the x402 Protocol?“.

Even projects that have only announced plans to develop x402-related initiatives—such as Karum and Praxis—have experienced rapid surges in recent days. Once the initial wave of FOMO subsided, these projects saw significant pullbacks, underscoring the risks inherent in sentiment-driven investing.

x402 Adoption Accelerates Across Multiple Chains

The x402 protocol’s explosive growth has attracted not only users but also the attention of multiple blockchain ecosystems. As an open, inherently multi-chain protocol, Coinbase’s Base chain is naturally its “home base,” but developments on Solana and BNB Chain are also noteworthy.

Yesterday, Solana founder toly tweeted, “x402 is cool.”

This tweet drove the $x402 meme coin on Trend.fun to briefly exceed a $4 million market cap. Shortly after, Trends.fun founder mable posted on X, proposing a “x402 Solana Hackathon” to scout promising AI payment projects, a proposal that received support from Solana’s global developer ecosystem lead, Jacob Creech.

Tokens such as $PAYAI and $dreams, which have shown strong market performance, are also based on Solana. At present, Solana enjoys a clear first-mover advantage.

The official BNB Chain Twitter account also highlighted four x402 protocol-related projects on BNB Chain yesterday: Unibase, pieverse, AEON.xyz, and TermiX AI.

Felix Fan, Head of OKX Web3 Wallet Mobile, tweeted yesterday that he received support from x402 protocol core contributor Bob Xu, and that they will jointly explore permissionless transactions between AI Agents on X Layer:

Unlike the early days of the Bitcoin ecosystem, when interest was minimal, x402’s explosive debut immediately attracted multi-chain attention, suggesting its development will be much faster.

Conclusion

After analyzing the past week’s changes in the x402 ecosystem, we can now answer the article’s central question.

First, the primary reason for x402’s sustained popularity is, in my view, Coinbase’s backing. The protocol’s long-term success hinges first on broad merchant adoption, then on user adoption. As Coinbase’s proprietary protocol, and with a foundation co-established with CloudFlare, x402 theoretically has the resources needed to drive mass adoption.

This also explains why, despite the presence of competitors like bitGPT’s h402 and Radius’s EVMAuth, there hasn’t been a proliferation of new protocols and assets like the BRC-20 boom—Coinbase’s brand alone is a major driver of market speculation.

Second, compared to the early days of BRC-20, which offered little narrative beyond launching new meme coins, x402’s meme coins are “the icing on the cake.” Participants now have a range of application tokens to choose from, and these tokens align with the protocol’s core narrative. While some may question the maturity of these applications, that’s not a major concern for most users. As long as capital can move within the narrative, there’s less risk of sudden, massive inflows or outflows.

It’s been a long time since the market has seen a fresh narrative like x402 that excites crypto participants, project teams, and ecosystem partners alike. Not only have meme coins experienced a surge, but application tokens have also regained attention—this marks a promising beginning.

Nonetheless, regardless of how optimistic one is about the x402 ecosystem’s prospects, it’s crucial to remain vigilant about the investment risks that come with overheated sentiment.

Disclaimer:

1. This article is republished from [BlockBeats]. Copyright belongs to the original author [Cookie]. If you have any objections to this republication, please contact the Gate Learn team, and the team will handle it promptly according to relevant procedures.
2. Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute investment advice of any kind.
3. Other language versions of this article are translated by the Gate Learn team. Without explicit mention of Gate, it is prohibited to copy, distribute, or plagiarize the translated article.