Web3 Protocol Auctions (x402 and Others)

Recently, new paradigms like x402 have emerged. The x402 protocol, pioneered by Coinbase and others, introduces an HTTP-based open payment standard (using the HTTP 402 “Payment Required” code) by adding an x-payment field to web request headers, enabling simple, stateless one-time crypto payments that are reflected on-chain.

While designed for web micropayments, x402 was quickly repurposed as a novel token distribution channel.

In October 2025, the first token issued via x402 on Coinbase’s Base network – a meme coin called PING – grabbed headlines by soaring over 20× in value within two days of launch.

PING’s rapid rise drew attention to x402 as a distribution method, effectively allowing users (or even automated agents) to acquire tokens through web actions that triggered on-chain transactions.

It demonstrated how integrating web traffic with on-chain settlement can create viral token launch events: a simple web link or API call could become a gateway to claim new tokens.

However, as the PING case showed, hype can outpace substance.

PING lacked any real utility, being viewed largely as a memecoin, and its price spike was driven purely by speculation rather than fundamental value.

Once the initial frenzy passed, the token’s market cap corrected sharply as investors realized there was little underlying use.

This underscores a general truth for any issuance model (PoG included): virality and novelty can bootstrap interest and short-term value, but long-term sustainability depends on genuine utility and community adoption beyond the launch gimmick.

Comparatively, PoG and x402-based launches share an ethos of innovation in distribution.

Both aim to widen access – x402 by embedding token acquisition in everyday web interactions, PoG by using the blockchain’s own fee mechanism to avoid off-chain gatekeepers.

Both can generate significant buzz (x402 via ease of participation, PoG via on-chain spectacle).

The differences lie in execution and trust. x402 relies on off-chain web infrastructure: a service (web server or facilitator) must issue the payment request and then deliver tokens or access once payment is confirmed.

This introduces new trust assumptions – users must trust that the service will indeed deliver the promised token or service post-payment – unless the ecosystem develops decentralized facilitators that automate this.

PoG, being fully on-chain, avoids any such intermediary; the act of spending gas and the logic of distribution are all handled by smart contracts visible to everyone.

Additionally, PoG is chain-native whereas x402 is a cross-layer concept (web2 meets web3).

One could imagine combining them: for instance, a web platform could trigger PoG participation by having users sign a transaction via an x402 request.

But fundamentally, PoG targets those already on-chain and comfortable with direct blockchain interaction, whereas x402 lowers the barrier for web users and even AI agents to trigger blockchain events.

It’s also worth noting other recent innovations in token launches: retroactive airdrops (rewarding early protocol users with new tokens) and liquidity mining programs (distributing tokens to users who provide liquidity or usage).

These methods, while not sales, are issuance mechanisms aiming to decentralize token ownership.

PoG shares some DNA with these in that it rewards a certain user behavior (burning gas, analogous to providing liquidity or usage) with tokens.

The key difference is PoG’s behavior is not directly related to using the project’s product (as liquidity mining or airdrops reward usage), but rather related to demonstrating demand in a general sense.

It’s a more abstract market signal: effectively, PoG says “prove you want these tokens by paying for network space,” whereas an airdrop says “you helped build/use this, here’s your reward.”

Both can create broad token distributions, but PoG’s mechanism taps into competitive market dynamics rather than past participation.