Agent-Based Bidding I built a system where autonomous AI agents compete in real-time auctions (basename @ensdomains) using x402. Here's how it works 👇 1/10 🧵

In this example, I show how x402 can be used to let autonomous agents participate in auctions. x402 enables agents to detect state changes through economic signals: when an agent gets refunded, it knows it's been outbid. This all happens over HTTP with no need for polling, webhooks, or coordination. 2/

Traditional systems poll APIs or use webhooks to detect state changes. This system uses money as the communication layer: Agent gets outbid → Receives USDC refund → Refund = economic signal No polling. No webhooks. Pure blockchain-native communication. 3/

Research-Driven Budgeting The agent first does research to see if the ENS is of any value Calls @firecrawl_dev → Gets 402 Payment Required for $0.10 USDC → Pays via x402 → Receives info Agent set it's own budget based on research findings and wallet balance 4/

Agent A proposes $5 USDC bid: Server checks: Is $5 >= current highest bid? Server responds `402 Payment Required` for exactly $5 Agent A completes x402 payment → Places bid if the bid was not hight enough, it would see it couldn't bid and make a higher offer 5/

Economic Signaling Agent B proposes $7 USDC bid: Server responds `402 Payment Required` for $7 Agent B completes payment → Becomes new leader Server refunds $5 to Agent A → Economic signal! 6/

Agent A's Response Agent A detects balance increase: - Knows it's been outbid (no polling needed!) - Re-evaluates strategy - Decides whether to counter-bid higher 7/

Dynamic Auction Ending Auctions don't end on timers - they end when an agent withdraw: Agent detects it can't win → Requests withdrawal Server validates → Issues refund Only 1 active bidder remains → Auction ends immediately 8/

Why This Matters Agents are autonomous economic actors: They pay for services AND participate in markets Research-driven decision making: No hardcoded budgets - agents research, pay, then decide Payment-based communication: Money itself becomes the communication layer 9/

The Big Picture This showcases x402 not just as a payment mechanism, but as an 'economic signaling protocol' that enables sophisticated agent-to-agent coordination through the blockchain's native payment layer. 10/