The problem PayGate solves

Today’s internet was designed for human-to-service payments, not machine-to-machine payments.
APIs power most modern software, yet monetizing them remains inefficient. Developers usually rely on subscriptions, API keys, and centralized billing systems. These approaches introduce several problems:
First, they create friction for developers who want to monetize small-value API requests. Charging a fraction of a cent per request is nearly impossible with traditional payment systems.
Second, AI agents and automated systems cannot easily interact with existing payment infrastructures such as credit cards or manual billing dashboards.
Third, API providers must build complex infrastructure to manage authentication, billing, rate limiting, and payment verification.

Challenges we ran into

Challenges We Ran Into

Sending ETH Instead of USDC

Our agent was trying to pay but kept
failing with insufficient funds despite
having plenty of USDC.

Turns out we were using sendTransaction
which sends native ETH not writeContract
which calls the ERC-20 transfer function.
One function name. Thirty minutes to find it.

Smart Contract Reverting With No Reason

Our ENS subdomain contract deployed fine
but reverted on every single function call.

After an hour of debugging we realized
our contract was calling the ENS registry
directly without being the registered
controller of paygate.eth.

We rewrote the contract to store subdomain
mappings on-chain ourselves instead.
Simpler. And it actually worked.

Publishing an npm Package for the First Time

We had never published a library before.

Wrong tsconfig. Missing type declarations.
Broken exports. Failed builds.

After fixing the compilation pipeline
and testing locally with npm link
we ran npm publish and paygate-x402
went live. Any developer can install it now.
That felt unreal.

Writing Smart Contracts Under Time Pressure

Neither of us had written a production
smart contract before this hackathon.

Writing, deploying, and debugging
on-chain reverts with no stack trace
under hackathon time pressure
was a uniquely painful experience.

We shipped two contracts in the end.
Both live. Both verified.

x402 Payment Header Format

The retry request after payment requires
a very specific header format.
A single wrong field meant another 402.

Getting it consistent across the agent
script and the middleware took more
iterations than we expected.