Original Article Title: "x402 Gradually Navigating Inward, Preemptively Unearthing New Asset Opportunities in ERC-8004"

Original Article Author: David, Deep Tide TechFlow

x402 is clearly on fire.

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

All kinds of Key Opinion Leaders (KOLs) have intensively published analyses, covering every angle from technical principles to project inventories.

However, two weeks ago, when we conducted early analysis of x402 and mentioned the potential of projects like PayAI, the market didn't react much.

In various narratives and rapidly shortened token lifecycles, conducting early research on new narratives makes it easier to identify opportunities related to assets.

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

This is not to say that the protocol itself lacks prospects, but the most obvious Alpha opportunity has already been extensively explored.

But just when everyone is focusing on x402, the observant will notice that another protocol has been frequently mentioned in English-speaking crypto circles recently:

ERC-8004.

What's even more interesting is that one of the proposers of ERC-8004, Davide Crapis, Head of the Ethereum Foundation's dAI team, revealed a detail in a September interview with Decrypt:

"ERC-8004 will support multiple payment methods, but having an x402 extension contributes to the developer experience."

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

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

The Same Person Driving Two Protocols at Once. What's the Logic Behind It?

If the x402 outbreak showcased the massive market for AI Agent payments, ERC-8004 might represent the other half of this puzzle that has yet to be fully recognized in this market.

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

ERC-8004: The Prerequisite for Payments Is Identifying AI

To understand ERC-8004, we first need to revisit a fundamental question in the AI Agent economy.

Imagine a scenario where AIs collaborate:

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

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

With x402 in place, payment is not an issue; a few lines of code can handle the USDC transfer. But before payment, your AI assistant faces a series of tricky identity issues:

Which of these self-proclaimed "professional data analysis AIs" is genuine, and which is a fraud? What is their past work quality? How many clients have given positive feedback, and how many have complained?

This is a bit like doing business in a world without Taobao, Yelp, or business registrations. Each transaction is a blind box, and every collaboration is a gamble.

Therefore, if we must explain it in one sentence, ERC-8004 is the "Business Bureau + Credit System + Qualification Accreditation Center" for AI Agents in the blockchain world.

It gives each AI Agent an ID, credit record, and capability accreditation, all recorded on the blockchain, open for anyone to verify and impossible for anyone to tamper with.

On August 13th 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 close ties to Google's Agent-to-Agent team.

In simple terms, ERC-8004 adds a trust layer to Google's A2A. In the words of the Ethereum Foundation, this is to establish a "trusted neutral channel" for building AI Agents.

Leaving aside the intricate details of the code, we can roughly see what 8004 does.

ERC-8004 is designed to be extremely concise, comprising only three on-chain registries:

· Identity Registry where each AI Agent receives an ERC-721 token as proof of identity. Yes, you read that right, AI Agents have been NFT-ized. This means an Agent's identity can be viewed, transferred, and even traded in any NFT-supporting wallet.

This NFT points to a standardized "Agent Card" detailing the Agent's name, skills, endpoint, and metadata. As it adheres to an open standard, any browser or marketplace can index it, enabling permissionless cross-platform discovery.

· Reputation Registry acting as the "Yelp" of the AI Agent world. Clients and other Agents can submit structured feedback, tagging it by skill or task. More significantly, they can attach x402 payment proofs. Only clients who have actually paid can review, preventing fake reviews.

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

· Validation Registry for high-value tasks, mere feedback isn't sufficient. The Validation Registry allows Agents to request third-party validations—be it TEE (Trusted Execution Environment) oracles, staking-backed reasoning, or zkML proofs.

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

If things get a bit technical, let's look at a specific example.

Imagine an exchange's AI Agent needs a weekly DeFi market analysis report, but it doesn't have this capability itself.

· Search for Service: The client Agent finds analyst Agent Alice through the identity registry, and views the service description on her NFT identity card

· View Reputation: Discovers Alice has 156 positive ratings, an 89% completion rate, and real reviews with x402 payment proofs

· Escrow Payment: Pays 100 USDC through x402 to a smart contract escrow, not directly to Alice

· Third-Party Verification: After Alice completes the report, validator Bob checks the quality and signs off on the verification registry

· Automated Settlement: The contract sees the validation is successful, automatically releases the funds to Alice, and the client leaves feedback

(Source: Researcher Yehia Tarek's Personal Column)

The entire process was carried out autonomously by three AI Agents based on the ERC-8004 trust framework, without any human intervention, completing a business transaction.

Hold on, what does x402 have to do with this?

Summing up the relationship between x402 and ERC-8004:

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

Specifically, x402 is a standard for micropayments between agents or users, removing payment friction, allowing one agent to automatically pay another for completing a task.

ERC-8004 is the identity and reputation layer for agents. It introduces on-chain validation, making every task and score traceable.

An easier-to-understand analogy is:

· x402 = ERC20

· ERC 8004 = Etherscan

The former allows you to directly pay API access fees based on call count, more like a payment standard; the latter is more like an on-chain AI agent registry, where each agent has an associated wallet, making it queryable and verifiable.

In fact, all of this is part of a broader "Crypto x AI" narrative, within a larger crypto AI economy:

· Crypto AI Economy = Discoverable AI Agents + Communicating AI Agents + Verifiable Computation

(Image Source: Twitter user @soubhik_deb)

How do you discover AI Agents then? Essentially, it means AI agents need to find each other, which is what ERC-8004 does by creating a registry on Ethereum to record the identities of AIs;

How do AI Agents communicate with each other? x402 is an open standard for agents to perform on-chain payments; there's also Google's A2A protocol, among others;

How do you verify all of this? Each AI Agent must engage in verifiable reasoning, inference, and action, which may be recorded in places that emphasize data availability.

Twitter user @soubhik_deb's post is worth reading, as it explains the above logic clearly and can be used as a basis to discover more Alpha project opportunities based on this logic.

So far, we have a full understanding of the relationship between x402 and ERC-8004, describing their relationship in terms of complementarity and mutual contribution to building the AI economy as a whole is more appropriate.

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

Beneficiary Projects Under the ERC-8004 Narrative

For the TL;DR version, you can refer directly to the image below.

When x402 exploded, the first to rise was a payment token like PING. However, ERC-8004's opportunity distribution is broader, with each layer, from infrastructure to applications, having its own logic. Understanding this logic is more important than chasing individual projects.

1. First is the Infrastructure Layer, such as Taiko and EigenLayer.

Taiko, L2 Execution Layer

Why would an L2 be the most avid supporter? The narrative here is that the Agent economy requires a cheap and fast chain. The mainnet is too expensive, costing several dollars in gas fees for each identity or reputation update, which Agents cannot afford. Taiko provides a solution by deploying the 8004 registry on L2, reducing costs. The contract was deployed on October 24 and could become the main battleground for Agent activity.

EigenLayer, Security Layer

The biggest challenge for 8004 is what to do when validators misbehave? EigenLayer's answer is: slashing. Validators stake ETH, and if they provide false validation, they lose their assets. EigenLayer is integrating 8004 into over 200 AVS, each of which could become a specialized Agent validation service.

The logic of infrastructure is simple: the more Agents, the more transactions, the more revenue. This is the business of selling shovels.

2. Next is the Middleware Layer, such as S.A.N.T.A and Unibase.

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

It positions itself in two narratives, acting as a connector between x402 and 8004. When an Agent finds another Agent through 8004 and then needs to make a payment through x402, S.A.N.T.A handles this process. More importantly, it enables cross-chain transactions, such as an Agent on Solana in the Ideal narrative needing to hire an Agent on Ethereum, where S.A.N.T.A can facilitate.

Unibase, Memory Layer

Agents not only need identity but also memory. Unibase provides persistent storage for each Agent, associated through the 8004 identity system. This means Agents can "remember" past interactions, accumulate experience, and even share knowledge. The x402+8004 integration was achieved on the BNB chain on October 26, leading the pack.

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

3. Finally, there is the application layer, such as the well-known Virtuals Protocol.

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

Currently, the platform has over 1000 Agent projects, with a daily trading volume exceeding $20 million.

For Virtuals, 8004 addresses a real-world issue: how to enable different Agents to recognize and interact with each other. A recent official announcement indicated that the upcoming ACP protocol update will fully support the 8004 standard, meaning that every Agent issued on Virtuals will automatically receive an on-chain identity and reputation system.

As for which applications can emerge, perhaps they can be integrated with Launchpad mechanics to further observe their updates in rule design and incentives.

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

In terms of upcoming events, one can look forward to Devconnect on November 21, featuring a Trustless Agents Day showcase, where the first batch of applications based on 8004 may demonstrate their functionalities at the conference. If a killer application emerges, it may trigger the first wave of hype.

By the end of this year, the author predicts that x402 ecosystem projects will enter an integration phase, likely announcing support for 8004. The synergies between the two protocols will have a 1+1>2 effect.

For conservative players, one may consider focusing on high-cap projects benefiting from 8004; whereas for more aggressive players, close attention to low-cap projects in the table above and emerging projects may be necessary.

After all, the crypto market has not been dominated by a narrative driven by technology for a long time. Whether x402 and ERC-8004 are a flash in the pan or have a lasting impact remains to be seen, to be judged by the market.

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