It's been almost a week since the x402 protocol ignited market enthusiasm thanks to the explosive popularity of the meme coin $PING. So far, the overwhelming market sentiment has been positive, with both optimistic outlooks for the protocol's future and detailed discussions of various projects. However, some voices suggest that the x402 protocol's rapid rise to popularity may not be able to sustain the inflated market expectations in the short term, leading to a period of weakness.
So, what changes have taken place in the x402 protocol ecosystem over the past week? After reviewing and analyzing the changes in the x402 ecosystem over the past week, we can give an answer to the content of the title of this article.
Market enthusiasm remains high
Regardless of the market's reaction to the rapid surge in $PING, $PING has undoubtedly raised awareness of the x402 protocol within the industry. Before the $PING surge, data from the x402 ecosystem over the past 30 days showed that $PING's minting interface had received over 150,000 x402 transactions, totaling approximately $140,000 USD. This significantly outpaced the second-placed Questflow, which had only 24,800 transactions and a value of less than $1,400 USD.
But now, data from just 24 hours has already far surpassed the previous 30-day figure. The top 10 services by interaction activity have already received approximately 280,000 transactions in the past 24 hours, double the previous 30-day figure. Furthermore, the transaction value reached approximately $246,000, double the previous 30-day figure.
It can be said that the x402 protocol is not a flash in the pan as of now and is still popular in the market.
Hype hotspots migrate from memes to applications
As the first meme coin born from the x402 protocol, $PING was once compared by many players to $ORDI, the first token of the BRC-20 protocol, during its peak FOMO period. However, $PING failed to maintain its rapid growth after breaking through $80 million in market capitalization, and has now retreated to approximately $29 million.
Meme coins are driven by market sentiment. Following the release of OKX CEO Star's tweet with a screenshot of the number $PING, there has been a short period of lack of tweets that can drive market sentiment, making the pullback in $PING understandable.
What makes the x402 protocol significantly different from other asset protocols like BRC-20 is that it is a payment + AI agent protocol. Therefore, players’ enthusiasm and funds have not been withdrawn from the x402 protocol, but have been transferred to application tags related to the x402 protocol ecosystem.
$PAYAI has emerged as a latecomer, becoming the new leader in the x402 protocol. Yesterday, $PAYAI's market capitalization briefly surpassed $76 million, a roughly 12-fold increase since its peak on October 24th. Currently, the coin has retreated, with a market capitalization of approximately $53 million.
This is mainly due to two reasons. The most important reason is that Payai is currently the second largest Facilitator (x402 protocol chain verification and settlement service provider) in the ecosystem besides Coinbase official:
Currently, PayAI has processed more than 14% of x402 transactions, and has become the largest facilitator in terms of the number of transactions processed, except for Coinbase.
In addition, Payai founder Notorious is the 7th-ranked contributor on the official Github of the x402 protocol, which is understood by players as "the project has a close connection with the x402 protocol."
Ecosystem-related tokens like $dreams and $SANTA have seen significant price increases. For a deeper understanding of these ecosystem- BlockBeats projects, see last week's BlockBeats article, "What is the x402 Protocol?" Like Inscription's 30x Gold Dog.
Even projects that merely mentioned plans to develop x402-related projects, such as Karum and Praxis, have seen sudden surges in value over the past few days. These projects have all experienced significant pullbacks after the short-term hype has dissipated, emphasizing the importance of being mindful of the risks of FOMO (Fear of Momentum).
Each chain layout x402 track
The popularity of the x402 protocol has not only attracted players but also attracted the attention of multiple chains. As an open protocol designed to support multiple chains, Coinbase's own Base chain is undoubtedly the "home" of this protocol. However, the development of x402 on Solana and BNB is also worthy of our attention.
Yesterday, Solana founder Toly tweeted, "x402 is cool."
This tweet caused the $x402 meme coin on Trends.fun to briefly surpass $4 million in market capitalization. Trends.fun founder mable subsequently proposed hosting an "x402 Solara Hackathon" on the social platform X to identify promising AI payment projects. This proposal received support from Jacob Creech, head of Solana's global developer ecosystem.
Tokens with outstanding market performance, such as $PAYAI and $dreams, are all on Solana. At present, Solana has a certain advantage.
The Official Twitter BNB chain account also tweeted yesterday to promote four x402 protocol-related projects on the BNB chain, namely Unibase, pieverse, AEON.xyz, and TermiX AI.
Felix Fan, head of the OKX Web3 wallet mobile app, tweeted yesterday that he has received support from Bob Xu, a core contributor to the x402 protocol, and will work together to explore the implementation of permissionless transactions between AI agents on the X Layer:
Compared to the early days of the Bitcoin ecosystem when no one was interested in it, the x402 protocol has attracted the attention of multiple chains as soon as it became popular, and it is believed that its development will be even faster.
Conclusion
After analyzing the changes that have taken place in the x402 ecosystem over the past week, we can answer the question in the title of this article.
First, I believe the biggest reason for x402's continued popularity is its Coinbase background. The biggest challenge for the protocol's long-term development is first merchant rollout and then user adoption. Since it's Coinbase's own protocol and has jointly established a foundation with CloudFare, it theoretically has sufficient resources to drive large-scale adoption.
This is also why, although the x402 protocol has some similar competitors, such as bitGPT's h402 and Radius's EVMAuth, there is no such thing as a bunch of new BRC-XXX protocols being frantically minted and issued as new assets as BRC-20 did back then - the Coinbase brand itself is a hype driver for players.
Secondly, compared to the early days of BRC-20, which focused solely on issuing new meme coins without any narrative to support them, x402's meme coins are the icing on the cake. Players now have a number of pre-existing application tags beyond meme coins, and these tags align with the protocol's narrative. While some may question the immaturity of these applications, this isn't a significant concern for players. Funds have room to flow within the narrative, preventing them from rushing in and out all at once.
It's been quite a while since we've seen a new narrative like the x402 protocol emerge, generating such enthusiasm among crypto players, project developers, and even the ecosystem. Not only are meme coins experiencing a surge in popularity, but application coins are also regaining the attention of players. This is a good start.
But no matter how optimistic we are about the prospects of the x402 ecosystem, we still need to pay attention to the investment risks when sentiment is overheated.
