Coinbase has announced an upgrade to the x402 protocol that introduces usage-based pricing for agentic AI compute requests, replacing the previous fixed-fee model.
In a post on X on Thursday, the Coinbase Developer Platform said the new “Upto” scheme is now live and is designed to enable variable-cost services for agentic AI, including large language model inference, compute tasks, and data queries.
Previously, x402 only supported exact, fixed-price payments, which worked well for deterministic APIs but limited services where costs vary based on usage, such as token count, compute time, or query complexity.
According to Coinbase Developer Platform, “Upto” is an EVM-based implementation that supports all ERC-20 tokens, while the CDP Facilitator enables fully gasless payments.
The update comes as interest grows in x402, with companies preparing for a shift toward agentic commerce that could demand high-volume, near-instant, low-friction payment systems for AI-driven services.
The “Upto” scheme addresses the flat-fee limitation by letting sellers set a maximum price while buyers authorize payments up to a specified cap.
On the server side, where costs can vary depending on task complexity, users are charged only for the actual compute required to complete the request. This means customers won’t be overcharged—and in some cases may pay less than their maximum approved amount.
Previously, both simple and complex AI requests were priced the same, leading to inefficiencies where users either overpaid or underpaid for agent-driven tasks. The upgrade allows users to set a spending ceiling upfront rather than estimating the exact cost of each task.
The x402 protocol was originally developed by Coinbase but was recently transferred to the Linux Foundation, with major tech players including Google, Microsoft, and Amazon Web Services participating through the x402 Foundation.
Despite growing attention around the protocol, adoption has declined in 2026 after peaking in November. According to Dune Analytics data, x402 recorded 13.7 million transactions between November 4 and November 10, its highest weekly volume on record.
Since then, usage has fallen sharply, dropping below 1 million weekly transactions in early January and continuing to decline throughout the first quarter. By the last week of March, the protocol recorded just 112,708 transactions.
