x402 isn’t good (yet) — Jan Curn, Apify

Hello everyone. Uh, last year here at AI Engineer World's Fair, David Kramer from Sentry had a mildly provocative talk called "MCP isn't good yet." And back then, MCP was the new kid on the block,right? It was, like, a lot of hype around it, people were, you know, excited about it.

But also, like, it wasn't really developed back then very much, and it was fairly clunky. And in this talk, David argued, "Hey, like, this technology is cool, but it has, like, a lot of rough edges,"right? So just, you know, go play with it, but, you know, have your expectations low,right?

By the way, they went on and actually built one of the best MCP servers on the market,right? Like, Sentry MCP is, is really, like, well- very well-designed server, like, nice in nice design and so on. And actually, over the last year, MCP became, like, a standard that's actually widely adopted, you know, across the industry.

Like, the top AI agents, like Claude and ChatGPT, actually, uh, Claude offers MCP connectors,right? So you can plug tools into your AI agents. ChatGPT calls it MC calls it apps, but you can also, like, you know, directory of different services you can plug into your Claude.

And it actually became a standard thing for agent-to-tool interaction,right? And, uh, despite a li-little, little hate also about MCP, you know, I have yet to see CLI connectors in any of these agents,right? So MCP won. And so inspired by David's talk, uh, today I have a similar talk, which is called "x402 isn't good yet."

And in that talk, I would like to argue, you know, that while x402 is very exciting technology, it has also still some rough edges, you know. And perhaps, if I do it this well, we'll also build one of the best integrations with x402 on the market, like Sentry did with MCP.

My name is Jan Curn. I'm the founder and CEO of Apify. And, uh, for those who don't know, Apify is the largest marketplace of tools for AI. We have about 45,000 of these tools. We call them actors, and they are spending use cases like, you know, extraction of data from social media sites, e-commerce, hospitality, travel, search engines, maps, but over time also, like, AI agents or agentic use cases, you know, different automations and so on,right?

And some of these tools, some of these actors are built by our community. Some are built by us. And our community is, is making, uh, now more than $1 million per month on, on payouts by selling these tools,right?

So they build the tools, we sell them to, to, to users, and, you know, we pass the money to them. And so it's a thriving marketplace. And I guess by now everybody understands, like, why we are so excited about agentic payments,right?

Because we really want our tools to be easily accessible to agents, like, wherever they are, with whatever protocol is out there. Uh, just two days ago, we launched, uh, together with, with Coinbase, our, our x402 integration. Uh, I would say the, the launch went pretty viral.

We got, like, about a million views. Uh, and

before, before this launch, there were about, like, 2,000 tools available on the on the agentic, uh, market, uh, basically on x402. We brought another 20,000 tools. So basically, we 10x 10x the size of the of the agentic market, uh, on x402.

So this is very exciting for us, and we, we believe also for the community. And actually, we're very excited about this topic, like, long term. So actually, last year here at AI Engineer World's Fair, I was the only one talking about the agentic commerce and agentic economy in general, and really argued that, like, in a couple of years, like, the most, most of the economic ac-activity in the world will be done autonomously between agents.

And actually, it looks like, uh, uh, really, uh, it picked up. Uh, I think, like, now everybody understands that agents, in order to get work done or, like, longer jobs without human intervention, they will actually need to have budget as well,right?

It's, it's not like, uh, you can do a lot of things in this world without, without money. And once agents, you know, can be trusted with money, they will complete, like, far longer and, you know, more complex tasks than they can do now.

So obviously, a lot of people understand this, uh, across the industry. So over the past year or so, we saw a lot of new standards or agentic payments protocol coming to the market because obviously, every player in fi-finance or, or payments is very excited about this opportunity because everybody wants to get a part of this of this, like, huge future agentic economy and, uh, and, uh, transaction volume.

So first was L402. Uh, it was, like, in mid-2020. But then, uh, Mastercard Agent Pay. We have x402 by Coinbase in May, May last year. KYA Pay from Skyfire with Visa. API 2 by Google. ACP by OpenAI and Stripe.

Tap by Visa. Uh, UCP by Google and Shopify. ACTP by Alipay. MPP by Stripe and Tempo. AMP by Alipay. APOP by UnionPay. APP by OKX. And finally, Agent Pay for machines by Mastercard. You can see this is really becoming a heated b-b-battleground and, uh, for the future of the agentic commerce.

And it's really hard to sort of keep track of all the standards, uh, and all the technologies. We're trying to. But I would say for crypto world, uh, actually, Svix, uh, asked all the speakers not to use, uh, sloppy AI-generated images in presentations, but I couldn't resist myself here.

Uh, I think for crypto world, like, the agentic commerce has been, like, super exciting news, like, because finally, there is, like, a really solid use case for crypto, except for, like, trading and gambling, buying illegal substances, uh, on marketplaces and hiding money away from your spouses,right?

So finally, agentic commerce really brings a, like, long-sawed, like, use case for crypto that, that I actually think is, is pretty solid. And I'm not, like, a crypto bro myself. I-I'm not hodling anything. Actually, I was fairly skeptical to crypto all the time.

But I feel that crypto is really well-suited for agentic commerce or agentic, uh, payments. Why? Because the traditional payment methods, uh, designed for people, are super expensive,right? And, you know, uh, like credit cards, PayPal, or, you know, ACH and ba-bank debit, they cannot be used for microtransactions.

They are just very ineffective, uh, as we saw in the previous presentation as well. So but there's another problem. There are buyer disputes. Like, anybody who's selling things online, you know that, uh, there are some people who sort of, like, buy services from your website and then dispute the payment and ask for a refund, you know, or, or dispute it through their bank, and you have to pay for it.

Like, in, like, traditional, like, well, human economy, there are some trust signals you can you can do with credit cards, you know, uh, like Stripe and, and others have different services to prevent fraud and so on. But in agentic interaction, like, you really have no idea who the agent is.

Like, there's no agent identity. I mean, there are some standards being developed, but it's really not clear, uh, who are you transacting with. So you just can't allow them to dispute the payments. You really need it needs to be one-way transaction, and it needs to be, like, safe for you,right?

So I think, uh, crypto is, is a super position for that. But also, there's an important part. Uh, crypto, if done well, it's like truly decentralized blockchain where no company has, like, ma-majority of, of, you know, of the of the vote in the network.

It can be really decentralized, and it can be, like, a public standard, you know, not owned by a single company who, for example, like Visa or Mastercard, sort of would abuse their dominant power, you know, to, to extract fees from the from the from the system.

So I-I'm, I'm very, very bullish on crypto in this in this space. And, uh, there are basically, like, currently two largest, uh, crypto payment, uh, providers for agentic payments. One is x402 from, from Coinbase, and second was MPP, machine payments protocol from Stripe.

Looking at the stats, uh, just yesterday, uh, x402 is, like, 20 times larger in number of transactions and the, the volume. Uh, so obviously, we went first with implementation of x402, but we added MPP in the process as well.

And today, I'm gonna share, like, a bit of our experience. This was also presented in the slide before. Uh, x402 built on the, uh, status code introduced, like, more like, almost 30 years ago in the original HTTP specification, like, called 402 Payment Required.

So this status code was waiting for 30 years patiently for someone to pick it up. And obviously, Coinbase took that opportunity because obviously, it's great for marketing. You know, we're finally make, uh, internet money work. It's awesome. So how it works, I'll just go quickly because we saw it in the last presentation as well.

So first, the client initiates, like, calls server with some API request. The server responds. And actually, this is important part. Specification enforces the server to respond 402 Payment Required. There is no other way to do that. It needs to use the 402.

Then, you know, the client creates a signature, uh, basically withdrawing money from the wallet, uh, or, you know, allocating the budget from, from, from the wallet, sends the signature to the to the server. Oh, the server verifies with the facilitator, which can be, like, Coinbase, for example, whether the transaction is correct.

It gets, uh, confirmation that the transaction is, isright. And then it's supposed to do the work,right? But there is a problem there. I'll get to that, uh, in a second. And after the work is done, uh, you send a transaction you send a request to the facilitator to settle, which means, like, you know, physically transfer the money to, to your own wallet.

And then the facilitator, uh, performs the operation on the blockchain. Transaction is confirmed. Everything is settled. All good. But there is a problem here. In this moment, like, until, until the transaction is, is actually submitted to the blockchain, the buyer can use the same wallet and same money to other transactions, basically.

There is, like, nothing, uh, preventing, uh, the, the client from double spending. So, you know, uh, it can just create, like, 1,000 signatures like that, send, like, 1,000 requests, and then, you know, like, uh, maybe it will not get a result.

But let's say if it's, like, a simple API call, you know, where there's, like, a, like, zero marginal cost for you as a provider, you can do it. You can do the work, you know, before, uh, you settle.

But imagine there is, like, some non-trivial work, or maybe you have to pay external service, and then you realize, oh, the money is gone,right? Uh, the, the, the client skipped out on the bill, which is not great. So there is a w-workaround that you can actually, uh, just do the work after the transaction is settled.

You just need to make sure you actually get the work done, you don't fail and so on because then the clients would be pretty angry, I guess. But there is a workaround for this. And then you send, like, 200 OK and payment responds all good.

So

there is a problem, though. Like, uh, as I showed before, like, uh, the standard requires HTTP 402, uh, as a first response from the server. But MCP plus auth requires HTTP 401. So there are, like, two conflicts in standards, and, you know, each of them are actually enforcing it.

And you cannot, like, sort of, like, you know, return true error codes or true status codes at the same time. So how do companies resolve that? Well, quite often, they create a dedicated, like, hostname, host, uh, like, let's say, x402.alchemy.com to serve just the agentic payments gateway.

So they implement basically a new API host just to serve, uh, the, the agentic payments. And then they have, like, MCP.apify. sorry, mcp.alchemy.com and maybe mpp.alchemy.com,right? But it sounds like an anti-pattern. Why would you have to duplicate, like, your, uh, API host for different payment providers?

It's like imagine, like, you had, like, amazon.com for different, like, credit cards. You have, like, 20 different Amazons. Like, this doesn't make sense,right? So, so I think this is, like, one of the weaknesses. It's like, I, I understand, like, using HTTP 402 is great for marketing, but I think there should be in protocol some way to circumvent that and use it use just purely headers, you know?

So, for example, the payment payment required header without the, the, the status code. And then, uh, originally, when, uh, x402 was created, it was designed for, uh, like, fixed payments. Uh, the, the first payment scheme they introduced was, uh, called Exact.

And it's, like, for simple API calls. Like, there is, like, a fixed fee per transaction, fixed fee per, per call, which is great for, I don't know, simple APIs. But unfortunately, Apify actors are tools on the marketplace. They typically perform bad jobs.

And, you know, they can run for, you know, a few seconds, but they can also run for a few hours and, uh, consume a lot of resources on the way. They are, like, typically, like, built, uh, as you go, kind of, like, meter billing.

So how to do that? Like, how to put this on x402? So in May 2025, uh, Coinbase introduced, uh, x402 with the Exact payment scheme. In December 2025, uh, they, uh, announced version two of the protocol, which was promising the up to payments payment scheme to kind of fix this problem of, like, metered billing.

But it, it took actually, uh, another, like, half a year almost, uh, to, uh, release the, the up to finally. It was just, like, two or three months ago. So we were super excited about that. We were like, finally, uh, we can make this work, uh, for our services.

But then we realized, actually, the same double spending problem is on, on Exact is also with, with up to. I mean, up to, it was just, just a small sort of, like, improvement to the protocol where when you, you know, call the tool, you say, oh, my maximum is $5, and then the, the, the server can charge anything up to $5.

But it doesn't prevent the double spending problem. So basically, we are sort of stuck again. So, you know, we had to go back to the drawing boards and figure, like, how to do that. And so one way we, we did it was we just used Exact payment scheme to kind of, like, fixed, uh, like, charge the fixed payment.

And then after the, the, the job is done, we, we would, like, refund the, the, the wallet with the with the leftover money, basically, the money that, uh, that wasn't spent. I mean, that worked, but, uh, so you charge, you do the work, you refund the remainder.

But that means, like, there's suddenly, like, two blockchain transactions. That means, like, uh, there's a time, you know, to, to settle those transactions. There might be, like, some fees associated with that and so on. And also, the clients will need to trust the server to kind of, like, hey, I give you the money, but you give it to me back,right?

But I think that, that, that's a milder issue. But it just feels somehow clunky. Like, why would we need to do these workarounds? You know, this protocol should support these things out of the box. So just two months ago, uh, Coinbase introduced, like, new payment scheme, uh, which is called batch settlement, which looks very promising.

We haven't implemented it yet, so we'll report soon on that. But basically, just quickly, it works like so first, the clients, like, deposit some money. So basically, it's actually, like, like, real transactional blockchain using some, uh, Ethereum virtual machine black magic, basically.

The money is put in the escrow. And then the, the client gets back a voucher, like, from the server. Say, hey, here is some cryptographic voucher, and you can use it to sign, like, microtransaction as part of this batch.

And then, like, the client sends, sends requests, for example, like, API calls or, you know, for, like, individual tokens, whatever, and, uh, uses, like, passes this voucher to, uh, sign those, like, micropayments. But these transactions are basically off-chain.

They are just, like, sort of, like, cryptographically guaranteed locally, but you don't need to, like, write these, like, to the to the to the blockchain, which again is inefficient, slow, you know, uh, expensive. And then at some point, you're like, hey, I, I, I accumulated a lot of these, like, microtransactions, so I just, like, settle them in batch.

And then, like, you basically perform the transactional blockchain, and then you can do this a couple of times and eventually refund the rest of the money, uh, like, sort of, like, release the escrow,right? So actually, this looks really cool, very exciting.

We'll, uh, we're currently working on implementing it now, so we'll see. But, uh, so how did we resolve, like, all this to make it work,right? So we didn't really want to create, like, new a new endpoints, uh, for different payment services.

Uh, we didn't want to, like, the like, hack the variable usage, you know, to our services. And also, we really don't want to, like, tweak too much our API because we have, like, tens of thousands of customers depending on that API.

So we just can't, like, sort of, like, you know, uh, do whatever, like, new, uh, agentic payment standard is out there, just implement itright away. So, so kind of to fix these problems, uh, let me introduce you, uh, let me introduce our newest, uh, service, uh, on Apify, which is called agi.apify.com.

And AGI, uh, is not, uh, what you mean it is. It's actually it stands for agent general interface. So instead of, like, application programming interface, we have agent general interface that can change anytime because it's used by agents, so they're flexible,right?

And on AGI, it's just a simple website with, like, one markdown document. It's not designed for people, so it kind of looks ugly, but it's okay. And there is instructions for agents, like, hey, how can you actually buy things on Apify yourself through x402, MPP?

We can iterate quickly on this on this on this website or on this service because, you know, uh, agents can pick up new version. Uh, it's not, like, fixed, like, API, uh, that, that, that needs to be basically, you know, uh, backwards compatible all the time.

And, uh, the way it works is, like, the agent comes to agi.apify.com, gets basically can buy a prepaid token. So basically, they say, like, hey, here's $5. Give me give me Apify token. We give them, like, Apify token back, and then they can use the Apify token, uh, through our normal API or through MCP to, uh, run our jobs and services, you know, uh, normally.

And it w it works pretty well. Uh, there is, like, no skill required. You just, like, point your agent to agi.apify.com. It picks it up. And, uh, I have here, like, a short demo. Uh, we're running out of time.

So this is just, like, example how it works like. Actually, the x402 ecosystem is, like, really early so that even, you know, uh, we have to build our own, like, local wallet, uh, tool, which you can, like, create, like, local, like, cryptographic key to charge, you know, with money and show QR code.

Like, I mean, these things are still not, not, not existing. I mean, the ecosystem is, like, super, super early. So I have the local wallet with $10. Then I call, like, uh, the agi.apify.com, uh, allocate, like, token with $1.

I get back, uh, 402 payment required. So there is, like, this, like, super long, like, payment required signature. Uh, I use Apify, uh, I su I use our MCPC, which is, like, MCPC, like, client to sign, uh, the payment, and then I can send the oh, oh, oh, oh.

This demo didn't work as expected. Uh, here we go.

Hmm.

Well, anyway, uh, I have one minute left, so demo will come later. Sorry about that. So to conclude my presentation, like, really, like, try it out and, like, try to build tr-try to use it. Like, actually, I tried try to use it for the first time, like, a couple of weeks ago because I always thought, oh my God, it's somehow complicated, you know?

There is a lot of this, like, weird crypto lingo, you know, like, like, I don't know what it what it means. But actually, it's really, really simple to, to play with that. You can, you know, get, get up and running in, like, 10 minutes.

And, uh, it's still super early. Uh, I think there's, like, $1 million transaction volume, like, per month. Like, this is nothing,right? Like, the economy is much, much bigger. But I think it will soon ramp up. And I think once, uh, really, this, like, era of, like, uh, token subsidies will end, I mean, when the when you really will have to pay for the tokens, you know, that your agents consume, I think suddenly this decision, whether to build or buy, will, you know, make more economic sense, actually, to buy external, you know, services for a lot of things rather than build from scratch.

And I think at this time, really, the agentic payments will explode. And, uh, very soon, uh, uh, the agentic commerce might, uh, overtake the normal commerce. Thanks a lot for your attention, and please come, uh, to join us, uh, in our booth.

And actually, I have another talk coming up in two hours, uh, about MCP and CLI, so you can check that one as well in Expo Stage 2. Thank you.