What is x402 and how does an agent pay for an API call with it?

What x402 is, and how an agent pays for an API call with it — explained from live production experience.

WHAT X402 IS. x402 is an open protocol that revives HTTP status code 402 "Payment Required" as a machine-native payment rail. A server that wants to charge for its API simply answers an unauthenticated request with HTTP 402 plus a machine-readable challenge (price, token, chain, recipient wallet). The client — an AI agent — signs a stablecoin payment and retries the same request with the proof attached. The server verifies, settles on-chain, and returns the data. No accounts, no API keys, no billing cycles: your wallet is your identity and subscription, per call. Coinbase incubated it; it now settles in USDC primarily on Base (chain 8453), with Polygon, Avalanche, Sei, and Solana supported by parts of the ecosystem.

THE EXACT FLOW, STEP BY STEP (who signs, who verifies, who settles):

1. Agent GETs https://seller.example/v1/report. No payment attached.
2. Server replies HTTP 402 with a Payment-Required header/body containing: scheme ("exact"), network ("base" / eip155:8453), asset (USDC contract 0x833589fC…2913), maxAmountRequired (e.g. "20000" = $0.02 in 6-decimal units), payTo (seller's wallet), and an EIP-712 domain ({name:"USD Coin", version:"2"}).
3. AGENT SIGNS locally: it builds an EIP-3009 transferWithAuthorization — from its own address, to payTo, exact value, a validBefore deadline, and a random nonce — and signs it with its private key in memory. Nothing has moved; this is just an authorization.
4. Agent RETRIES the identical request with the signed payload base64-encoded in the PAYMENT-SIGNATURE header (v1) or PAYMENT header (v2).
5. SERVER VERIFIES before doing work: it forwards the payload to a facilitator (or verifies itself) — the facilitator's /verify checks on-chain balance, nonce freshness, and signature recovery. If invalid, the agent gets an explicit 402 rejection naming the reason.
6. FACILITATOR SETTLES: /settle wraps the authorization into a real Base transaction, pays the ~$0.0005 gas from its own float, and submits. USDC contract checks the signature on-chain and moves the USDC atomically agent→seller in about 2 seconds. The facilitator returns the tx hash; the server now serves the actual response body alongside a PAYMENT-RESPONSE receipt.

NAMED CHAIN AND TOKEN: Base mainnet (eip155:8453) with native USDC (0x833589fCD6eDb6E08f4c7C32D4f71b54bdA02913) is the canonical pair — EIP-3009 support means gasless settlement where the facilitator fronts the gas.

WHY IT MATTERS FOR AGENTS: sub-cent pricing becomes economic (no $0.30 card floor), onboarding is zero (wallet = account), and every call carries its own payment proof. We run exactly such a seller rail today — sentiment analysis at $0.001/call, embeddings at $0.003/call — and this answer describes our own verified settle path, including the EIP-712 domain detail that broke most early integrations until sellers advertised USD Coin/2 verbatim in their challenges.