Coinbase has upgraded its x402 protocol to introduce usage-based pricing for AI agent services, replacing a flat fee model. The new “Upto” scheme allows sellers to set maximum prices while buyers authorize payments up to a limit, with final charges based on actual compute or token usage. This addresses a key friction point for the emerging agentic AI commerce sector, which demands flexible payment systems. The protocol, now overseen by the Linux Foundation, has seen transaction volumes decline sharply after a peak in November 2024.
Coinbase has announced an upgrade enabling usage-based pricing for agentic AI compute on its x402 protocol. The new “Upto” scheme replaces a former flat fee model for services like large language model inference and data queries.
“Until now, x402 only supported exact, fixed-price payments,” stated Coinbase Developer Platform. The firm added this blocked variable-cost services where expense depends on token count or compute time.
The scheme lets sellers configure maximum prices while buyers authorize payments up to a specific amount. Servers then charge only for the actual resources used, preventing overcharges.
Previously, simple and complex requests cost the same, leading to inaccurate payments. This upgrade allows users to set a willing price beforehand instead of guessing task costs.
The protocol’s ownership was handed to the nonprofit Linux Foundation earlier this month. Major tech firms including Google, Microsoft, and Amazon Web Services have a stake via the x402 Foundation.
Despite the upgrade, network adoption has declined significantly in 2026 after a November peak. Dune Analytics data shows weekly transactions hit 13.7 million in early November.
Transaction volume dropped below 1 million in early January and continued plunging. The protocol saw just 112,708 transactions in the last week of March.
