What is x402 and How Does it Work?

In the ever-evolving landscape of digital transactions, protocols like x402 are emerging to address specific challenges in payment systems. Developed by Coinbase in May, x402 brings back a long-dormant aspect of web standards to enable seamless, programmatic payments. With AI agents now actively leveraging the protocol, activity on x402 has surged by over 10,000% in just one month, according to Dune Analytics data. This article explores the fundamentals of x402, delving into its mechanics, features, applications, and the expanding ecosystem of related cryptocurrencies.