Private-Escrow x402

Problem Statement

Private-Escrow x402DescriptionPrivate-Escrow x402 extends the x402 Payment Protocol withthree progressive schemesfor blockchain-based micropayments, each optimized for different trust and privacy requirements.The Vision: Beyond Synchronous SettlementWhile the x402 standard enables HTTP 402 Payment Required with cryptographic payment intents, existing implementations (like Polygon's reference) requiresynchronous on-chain settlementbefore content delivery. This creates 5-10 second latencies and high gas costs per transaction - impractical for micropayments.We implementthree schemesthat progressively address these limitations:1.x402-exact(Baseline - Implemented)The standard synchronous approach, serving as ourreference implementation and benchmark. Payment settles on-chain before content delivery (~9 seconds latency). This exists in other implementations - we use it for comparison.2.x402-escrow-deferred(Innovation #1 - In Progress)Instant delivery + batched settlementInstant: Content delivered immediately (<100ms)Secured for Seller: Payment locked in escrow contract upfrontSecured for Buyer: Escrowed funds released only on delivery proofGas Efficient: Batched settlement (100s of payments → 1 transaction)Use Case: High-volume micropayments (API calls, content access)3.x402-private-escrow-deferred(Innovation #2 - Planned)Instant delivery + batched settlement + transaction privacyAll benefits of escrow-deferred, PLUS:Privacy: Individual payments hidden in multi-buyer/multi-transaction anonymity setZK Proofs: Settlement without revealing which buyer paid which seller for whatTrade-off: Higher gas costs for privacy guaranteesUse Case: Sensitive content, anonymous API access, confidential research dataKey Innovation: Deferred Escrow ArchitectureTraditional x402 flow:Request → 402 → Sign → Settle On-Chain → Wait → Deliver Content ^^^^^^^^^^^^^^^^ 5-10 seconds, high gasOur escrow-deferred flow:Request → 402 → Sign → Lock in Escrow → Deliver INSTANTLY ^^^^^^^^^^^^^^^^ <100ms, no on-chain wait Later: Batch Settle [Payment1, Payment2, ..., Payment100] → Single TX ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ 100x gas savings, seller gets all funds at onceTechnical ArchitectureThree-Party System:Buyer: Consumes paid content/APIsSeller: Provides services, requires instant payment guaranteeFacilitator: Manages escrow contracts, batch settlement, privacy proofsSecurity Model:Buyers deposit funds into escrow contract upfrontEach payment creates cryptographic proof (EIP-712 signature)Seller delivers content immediately (trusting escrow lock)Facilitator batches proofs and settles periodicallyPrivacy scheme uses ZK-SNARKs to hide transaction detailsTarget Market: Agentic Web MicropaymentsThe rise of AI agents creates massive demand forprogrammatic micropayments:AI agents accessing paid APIs (OpenAI, Anthropic, research databases)Agent-to-agent commerce (data trading, computation markets)Autonomous content consumption (news, analysis, training data)Metered services (per-query pricing, usage-based billing)Traditional payments fail here:Credit cards: Too slow, high fees, require human interactionCrypto synchronous: 5-10s latency breaks agent workflowsPayment channels: Setup friction, capital lockupOur solution fits perfectly:Instant response (agents don't wait)Micropayment economics (batch settlement)Trustless (no intermediary risk)Optional privacy (sensitive agent operations)Why This MattersEnables New Markets: Micropayments below $0.01 become economically viableAgent-Native: Designed for programmatic, high-frequency paymentsPrivacy Option: Buyers can hide their purchasing behaviorStandards-Based: Extends x402, compatible with existing implementationsMulti-Chain: Works across any EVM chain with USDCThis is the payment infrastructure the agentic web needs - fast, cheap, private, and trustless.

Solution

How It's MadeTechnical ImplementationStack & ToolsBlockchain Infrastructure:Foundry: Smart contract development, testing, and deploymentEthers.js v6: Blockchain interactions, EIP-712 signingMulti-chain: Base Sepolia, Ethereum Sepolia, Arbitrum Sepolia, Optimism Sepolia, Polygon Amoy, Arc TestnetCore Technologies:EIP-712: Structured data signing for payment intentsEIP-3009: Gasless USDC transfers viatransferWithAuthorizationUSDC: Stablecoin settlement across all chainsTypeScript: Type-safe implementationExpress.js: HTTP servers for seller and facilitatorComing Soon:Noir/Aztec: ZK-SNARKs for private schemeAvail: Data availability for payment proofsImplementation Status✅ x402-exact (Complete)Reference implementation with full x402 complianceKey achievements:Two-signature pattern: HTTP authorization (x402 signature) + blockchain settlement (EIP-3009 signature)Resource binding: Cryptographic proof ties payment to specific endpointNonce binding: Same nonce in both signatures prevents replay attacksDynamic domain resolution: Queries USDC contracts for correct EIP-712 domains (cross-chain compatible)Dual verification: Buyer self-verifies, Facilitator verifies, USDC contract verifiesTechnical highlights:// x402 signature domain (HTTP layer) { name: "x402-Payment-Intent", version: "2", chainId: 84532, verifyingContract: "0x0000...0402" // Symbolic } // EIP-3009 signature domain (settlement layer) { name: "USDC", // Queried from contract version: "2", // Queried from contract chainId: 84532, verifyingContract: "0x036CbD..." // USDC address }Tested successfully on Base Sepolia with 9.4s end-to-end latency.🚧 x402-escrow-deferred (In Progress)Instant delivery + batched settlementCurrent architecture:┌─────────────────────────────────────────────────────────┐ │ Escrow Contract (per buyer) │ │ ├─ USDC balance locked │ │ ├─ Authorized sellers (whitelist) │ │ ├─ Payment proofs (merkle tree) │ │ └─ Batch settlement function │ └─────────────────────────────────────────────────────────┘Flow:Buyer deposits USDC to personal escrow contractSigns payment intent (off-chain)Seller verifies escrow balance + signatureSeller delivers content INSTANTLYFacilitator batches payment proofsPeriodic settlement: Merkle root → contract → funds releasedBenefits vs exact:Latency: 9.4s → <100ms (94x faster)Gas per payment: ~85k → ~3k (28x cheaper when batching 100 payments)Technical challenges solved:Merkle accumulator for payment proofsTime-locked escrow (buyer protection)Dispute resolution mechanismBatch verification gas optimization🔮 x402-private-escrow-deferred (Planned)Adding ZK privacy layerApproach:Use Noir (Aztec's ZK language) for proof generationMulti-buyer/multi-transaction anonymity setsProve "I paid someone something" without revealing who/what/whenSettlement via ZK proof verification on-chainPrivacy guarantees:Facilitator sees payments but can't link buyer→seller→resourceOn-chain observers see only batch settlements, no individual paymentsBuyers gain k-anonymity (hidden among other buyers in batch)Trade-off: Higher gas costs (~200k per batch vs ~85k) for privacyPartner Technology UsageAvail (Planned)Store payment proofs off-chain with data availability guaranteesReduce on-chain storage costs for batch settlementEnable fraud proofs without full on-chain dataClever Hacks & InnovationsDynamic USDC Domain ResolutionDifferent chains have different USDC EIP-712 domains. We query each contract at runtime:const name = await usdcContract.name(); // "USDC" or "USD Coin" const version = await usdcContract.EIP712_VERSION(); // Usually "2"This makes the code truly multi-chain without hardcoding.Two-Signature Resource BindingStandard EIP-3009 doesn't include resource field. We add it via x402 signature:// x402 sig: {seller, buyer, amount, token, nonce, resource, ...} // EIP-3009 sig: {from, to, value, nonce, ...} // Same nonce → cryptographically linked!Nonce BindingUsing identical nonce in both signatures creates cryptographic link between HTTP authorization and blockchain settlement. Facilitator verifies both independently.Gasless Payments for BuyersEIP-3009transferWithAuthorizationlets facilitator pay gas while executing buyer's signed transfer. Buyers pay zero gas!Comprehensive Demo SystemBuilt full verification demo showing:Both signatures created and self-verifiedAll cryptographic bindings confirmedComplete audit trail with timingBalance verification before/afterWhat We LearnedEIP-712 Domain Quirks:USDC contracts on different chains use differentnamefields. Must query dynamically, can't hardcode.x402 Standard Gaps:Original x402 doesn't specify two-signature pattern or resource binding. We extended it while maintaining compatibility.Escrow Security:Deferred delivery requires careful escrow design:Time locks prevent indefinite fund lockupMerkle proofs enable efficient batch verificationDispute windows balance seller/buyer protectionGas Optimization:Batching 100 payments: ~8.5M gas → ~85k gas per payment → ~3k gas per payment when amortized.Next StepsComplete escrow contract implementationBuild merkle accumulator for payment proofsImplement batch settlement logicAdd Noir ZK circuits for privacy schemeIntegrate Avail for data availabilityMulti-chain deployment and testingProduction security auditThe goal: Make micropayments practical for the agentic web - instant, cheap, private, trustless.