Coinbase has announced an upgrade to the x402 protocol, enabling usage-based pricing for agentic AI compute requests, replacing the former flat fee model.
In a post on
“Until now, x402 only supported exact payments at a fixed price. That works fine for deterministic APIs. But it blocked an entire category of services whose costs depend on usage, such as the number of tokens, computation time, or complexity of queries,” according to Coinbase Developer Platform.
“Upto is an EVM implementation that supports all ERC20s, and CDP Facilitator fully supports gasless payments,” it added.
This move comes amid growing support for the x402 protocol, as a wide range of businesses prepare for the future adoption of agentic commerce, which is expected to bring extreme levels of network demand and require frictionless payments and near-instantaneous transactions to support agentic AI.
The flat fee problem is solved
The Upto scheme allows sellers to configure maximum prices, while buyers can authorize prices up to a certain amount.
On the server side, where costs fluctuate, the server only charges for the amount actually needed to complete the task, meaning users are not overcharged and may even pay less than the maximum price specified.
Previously, simple and complex requests cost the same amount, causing some users to pay too much or too little for tasks performed by AI agents. This upgrade allows users to set prices they are willing to pay for a task, instead of guessing how much they think the task will cost an agent to complete.
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The protocol, developed by Coinbase, was transferred to the non-profit Linux Foundation earlier this month, with major tech companies such as Google, Microsoft and Amazon Web Services having a stake in the protocol through the x402 Foundation.
Despite the hype around x402, the network has seen declining adoption rates through 2026 after reaching peak levels in November, data from Dune Analytics shows. Between November 4 and 10, the protocol saw 13.7 million transactions, its largest week ever.
However, it has fallen sharply since then, with weekly transaction volume falling below 1 million in early January and falling further in the first quarter. As of the last week of March, x402 saw only 112,708 transactions.
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