x402 is gradually becoming more competitive, preemptively exploring new asset opportunities in ERC-8004.

Written by: David, Deep Tide TechFlow

Original link:

x402 is obviously popular.

CoinmarketCap data shows that the trading volume of various projects in the x402 ecosystem has surged 137 times, with the first ecosystem token PING skyrocketing from zero to a market value of 30 million dollars in just a few days.

Various KOLs have been intensively posting analyses, covering all conceivable angles from technical principles to project reviews.

Two weeks ago, when we earlier analyzed x402 and mentioned the potential of projects like PayAI, there wasn't much noise in the entire market.

In various narratives and shortened versions of token lifecycles, researching new narratives in advance makes it easier to identify opportunities for related assets.

(Related reading: Google and Visa are both positioning themselves; what investment opportunities are hidden in the undervalued x402 protocol?)

Now, every time you refresh Twitter, a new “x402 ecosystem project” pops up; to be honest, if you are just starting to research x402 now, it might be a bit late.

It's not that the protocol itself lacks potential, but rather that the most obvious Alpha opportunities have already been fully exploited.

But just when everyone is focused on x402, the observant will notice that another protocol has recently been frequently appearing in discussions within the English crypto community:

ERC-8004.

Interestingly, one of the proponents of ERC-8004, Davide Crapis, head of the dAI team at the Ethereum Foundation, revealed a detail during an interview with Decrypt in September:

“ERC-8004 will support multiple payment methods, but having the x402 extension helps enhance the developer experience.”

Wait, does it support multiple payment methods? Isn't x402 just a payment protocol? Why does ERC-8004 also involve payments? Are they in competition or are they complementary?

At the beginning of October, when the Ethereum Foundation announced the final version of ERC-8004, the signatories included Marco De Rossi from MetaMask, Jordan Ellis from Google, and Erik Reppel from Coinbase, who is also the creator of x402.

The same person is simultaneously promoting two agreements. What is the logic behind this?

If the explosion of x402 has shown everyone the huge market for AI Agent payments, then ERC-8004 may represent another piece of the puzzle in this market that has not yet been fully recognized.

When everyone is chasing the payment track, perhaps the real opportunity lies outside of payments.

ERC -8004: The premise of payment is to register identity for AI.

To understand ERC-8004, we must first return to a fundamental issue in the AI Agent economy.

Imagine a scenario of AI collaboration:

Your personal AI assistant needs to complete a complex task by preparing a market analysis report for your upcoming product launch.

This task exceeds its capabilities, so it needs to hire other specialized AIs: one for data scraping, one for competitive analysis, and one for chart creation.

Now with x402, payment is not an issue; a few lines of code can complete a USDC transfer; but before the payment, your AI assistant faces a series of tricky identity problems:

Which of these so-called “professional data analysis AIs” are real and which are scams? What is the quality of their past work? How many clients have given positive reviews, and how many complaints have there been?

This is a bit like doing business in a world without Taobao, without Dianping, and without business registration. Every transaction is a blind box, and every collaboration is a gamble.

Therefore, if I had to explain it in one sentence, ERC-8004 is the “Business Administration Bureau + Credit Reporting System + Qualification Certification Center” for AI Agents in the on-chain world.

It gives each AI Agent an ID, credit record, and capability certification, all of which are recorded on the blockchain, accessible for anyone to query, and cannot be tampered with by anyone.

On August 13 of this year, Davide Crapis from the Ethereum Foundation, Marco De Rossi from MetaMask, and independent AI developer Jordan Ellis jointly submitted the EIP-8004 proposal.

Interestingly, this Jordan Ellis was later confirmed to have a close relationship with Google's Agent-to-Agent team.

In simple terms, ERC 8004 adds a layer of trust to Google's A2A. In the words of the Ethereum Foundation, this is to establish a “trustworthy neutral track” for AI Agents.

Discarding the complicated details of the code, we can take a rough look at how 8004 works.

The design of ERC-8004 is extremely streamlined, containing only three on-chain registries:

Identity Registry Each AI Agent receives an ERC-721 token as an ID card. Yes, you read that right, AI Agents have been tokenized as NFTs. This means that the Agent's identity can be viewed, transferred, and even traded in any wallet that supports NFTs.

This NFT points to a standardized “Agent Card” that describes the name, skills, endpoints, and metadata of this Agent. Because it follows open standards, it can be indexed by any browser or marketplace, enabling cross-platform permissionless discovery.

Reputation Registry This is the “Dianping” of the AI Agent world. Customers and other Agents can submit structured feedback and tag it by skills or tasks. More importantly, proof of payment x402 can be attached. Only customers who have actually paid can leave a review, preventing fake reviews.

All reputation signals are public goods. This means that anyone can build their own reputation scoring system based on this data.

Validation Registry For high-value tasks, mere evaluation is not enough. The Validation Registry allows Agents to request third-party verification - which can be a TEE (Trusted Execution Environment) oracle, staking guarantee reasoning, or zkML verification.

This is the qualification certification of the Agent world. An Agent claiming to perform financial analysis can cryptographically prove that it has indeed run a specific model and produced specific results.

If it gets a bit technical, let's take a specific example.

Suppose an exchange's AI Agent needs a weekly DeFi market analysis report, but it does not possess this capability.

Search Service: Customer Agent finds Analyst Agent Alice through the identity registry and views the service introduction on her NFT identity card.

Check reputation: Found that Alice has 156 positive reviews, an 89% completion rate, and real reviews with x402 payment proof.

Guaranteed payment: Pay 100 USDC to the smart contract escrow through x402, not directly to Alice.

Third-party verification: After Alice completes the report, the verifier Bob checks the quality and signs the validation registry for confirmation.

Automatic settlement: The contract sees that the verification has passed and automatically releases the funds to Alice, with the client leaving a review.

(Source: Researcher Yehia Tarek's personal column)

The entire process requires no human intervention, and three AI Agents autonomously completed a commercial transaction based on the trust system of ERC-8004.

Wait, is this related to x402?

To put it simply, the relationship between x402 and ERC-8004 is:

x402 solves the payment problem of AI Agents, while ERC-8004 addresses the trust issue, and both are essential for a truly autonomous AI economy.

Specifically, x402 is the standard for micropayments between agents or between users, eliminating payment friction; it allows one agent to automatically pay another agent for completing a task.

ERC-8004 is a proxy identity and reputation layer. It introduces on-chain verification, making each task and score traceable.

A more easily understandable analogy is:

x402 = ERC20

ERC 8004 = Etherscan

The former allows you to pay API access fees directly based on the number of calls, more like a standard for payments; the latter is more like a registry of AI agents on the blockchain, with each agent having an associated wallet that can be queried and verified.

In fact, this is all part of a larger narrative of “Crypto x AI”, within a vast Crypto AI economy:

Crypto AI Economy = Discovering AI Agents + Communication between AI Agents + Verifiable Computation

How to discover AI Agents? In fact, it is precisely that AI Agents can find each other, which is what ERC-8004 does, creating a registry on Ethereum to record the identities of the AIs.

How can AI Agents communicate with each other? x402 is an open standard for agents to conduct on-chain payments; there is also Google's A2A protocol, etc.

How can we verify all of this? Each AI Agent must perform verifiable reasoning, inference, and actions, which may be recorded in places that emphasize data availability.

This post by Twitter user @soubhik_deb is worth reading; it clearly explains the above logic and can also be used to discover more Alpha project opportunities based on this logic.

At this point, we have fully understood the relationship between x402 and ERC-8004, and it is more appropriate to describe their relationship as complementary and collaboratively building the overall picture of the AI economy.

If you want a clearer and more distinct comparison, here is a flowchart:

Beneficiary Projects under ERC-8004 Narrative

For those who don't want to read much, you can directly refer to the image below.

When x402 explodes, the first to rise are payment tokens like PING. However, the opportunity distribution of ERC-8004 is broader, with its own logic at every layer, from infrastructure to applications. Understanding this logic is more important than chasing individual projects.

First is the infrastructure layer, such as Taiko and EigenLayer.

Taiko, L2 Execution Layer

Why would an L2 be the most active supporter? The narrative here is that the Agent economy needs a cheap and fast chain. The mainnet is too expensive, with gas fees of several dollars for each update of identity or reputation, which agents cannot afford. Taiko offers a solution by deploying the 8004 registry on L2, reducing costs. The contract was deployed on October 24, which could become the main battlefield for Agent activities.

EigenLayer, security layer

8004 The biggest challenge is what to do if validators act maliciously? EigenLayer's answer is: staking penalties. Validators stake ETH, and if they provide false validation, their assets are forfeited. EigenLayer is integrating 8004 into over 200 AVS, each of which may become a specialized Agent validation service.

The logic of infrastructure is simple: the more Agents there are, the more transactions there are, and the more income there is. This is a business of selling shovels.

Next is the middleware layer, such as S.A.N.T.A and Unibase.

S.A.N.T.A, Payment Bridge

Its positioning lies in two narratives, the connector between x402 and 8004. When one Agent finds another Agent through 8004 and then needs to pay via x402, S.A.N.T.A handles this process. More importantly, in cross-chain scenarios, for instance, under the ideal narrative where a Solana Agent needs to hire an Ethereum Agent, S.A.N.T.A can play a role.

Unibase, Memory Layer

Agents not only need identity but also memory. Unibase enables every Agent to have persistent storage, associated through the 8004 identity system. This means Agents can “remember” previous interactions, accumulate experiences, and even share knowledge. The x402+8004 integration has been implemented on the BNB chain as of October 26, leading the way.

The value of middleware lies in its irreplaceability. You can switch L2, but certain connectivity features are unique.

Finally, there is the application layer, such as our old friend Virtuals Protocol.

Virtuals is an AI Agent token issuance platform that allows users to create, invest in, and trade AI Agent tokens through a bonding curve mechanism.

Currently, there are over 1000 Agent projects on the platform, with a daily trading volume exceeding 20 million dollars.

For Virtuals, 8004 addresses a practical problem: how to enable recognition and interaction between different Agents. Recently, its official Twitter announced that the ACP protocol update will fully support the 8004 standard, which means that every Agent issued on Virtuals will automatically gain an on-chain identity and reputation system.

As for which application can emerge, it may be combined with the Launchpad gameplay, and further observe its updates in rule design and incentives.

Overall, x402 addresses the payment issue, while ERC-8004 addresses the trust issue. x402 took 5 months from release to breakout, and 8004 may be even faster.

On the timeline, you can pay attention to the Devconnect on November 21, which features a Trustless Agents Day demonstration session. The first batch of applications based on 8004 may showcase their functions at the conference. If a killer application emerges, it could trigger the first wave of speculation.

At the end of this year, I predict that the x402 ecosystem project will enter a consolidation phase and is likely to announce support for 8004. The synergy between the two protocols will create an effect of 1+1>2.

If you are a conservative player, you may want to pay attention to large-cap infrastructure projects that benefit from 8004; however, if you are more aggressive, you need to closely monitor the small-cap projects in the table above as well as the emergence of new projects.

After all, the crypto market hasn't been dominated by a technology-driven narrative for a long time. Whether this time's x402 and ERC-8004 are just a flash in the pan or have far-reaching effects will be left to the market to test.