Coinbase has rolled out a significant upgrade to its x402 protocol, introducing a usage-based pricing scheme named “Upto” to replace the previous flat-fee model for agentic AI compute requests. The change is designed to create more equitable pricing for variable-cost services like large language model (LLM) inference, compute, and data queries.
"Until now, x402 only supported exact, fixed-price payments. That works great for deterministic APIs. But it blocked an entire category of services where the cost depends on usage, such as token count, compute time, or query complexity," the Coinbase Developer Platform said in a statement on X.
The new "Upto" model allows sellers to set maximum prices for services, while buyers can pre-authorize payments up to that cap. The final charge is based on the actual resources consumed, meaning users may pay less than the authorized maximum but never more. This EVM implementation supports all ERC20 tokens and features fully gasless payments through the CDP Facilitator, aiming to reduce friction for on-chain AI agent transactions.
This upgrade comes as the protocol, whose ownership was transferred to the Linux Foundation, aims to bolster its position in the anticipated "agentic commerce" economy. However, on-chain data from Dune Analytics shows a steep drop in adoption for the x402 protocol. After peaking at 13.7 million weekly transactions in November, volume fell below 1 million in early January and stood at just 112,708 in the last week of March. The new pricing model may be a key step to reverse this trend and attract more developers and users to the platform.
This article is for informational purposes only and does not constitute investment advice.
