Original author: Eli5DeFi

Original translation by Chopper, Foresight News

In the past few days, as the x402 narrative has gained traction, attention has surged for AI agents as a payment method. But have you heard of ERC-8004?

You may have missed the x402 hype, but don't miss this important protocol.

What is ERC-8004?

ERC-8004 is an Ethereum-based protocol designed to establish a trust, identity, discoverability, and reputation system for AI agents, complementing the existing x402 agent payment infrastructure.

In short:

• x402 → Automating AI-Powered Micro-Payment Tasks
• ERC-8004 → Provides on-chain identity and reputation tracking functionality for AI agents

Why is ERC-8004 important?

ERC-8004 aims to create a distributed agent economy to help AI development break free from centralized control.

It will build a permissionless, decentralized, censorship-resistant, and privacy-protecting AI system, making Ethereum the underlying foundation for future AI agent collaboration.

Furthermore, its importance is also reflected in the following aspects:

• Establish an on-chain business registration and reputation system for AI agents, providing an immutable public identity and historical record;
• Reusing existing Ethereum (L1/L2) infrastructure eliminates the need to create new blockchains, thus avoiding reinventing the wheel;
• The architecture is lightweight, utilizing only the blockchain for visibility and data storage, while other functions are deployed off-chain;
• To achieve the sustainability of the AI economy and support composable and scalable applications across infrastructure.

Tory explained the broader implications of ERC-8004: "AI agents can cause harm, and through ERC-8004, the agent with the 'cleanest' public record will ultimately prevail."

https://x.com/MTorygreen/status/1982900869860573399

How does ERC-8004 work?

The ERC-8004 architecture is simple, with its core consisting of three on-chain registry entries:

Identity Registration. Each AI agent receives an ERC-721 NFT as an identity identifier, which can be viewed in any NFT wallet and is transferable. This NFT is associated with an "Agent Card," which includes the name, function, and end node, facilitating quick discovery of suitable agents.

Reputation registration. A decentralized feedback system is built, allowing customers and agents to submit reviews based on x402 payment vouchers. This ensures that only the actual parties involved in the transaction can comment, reducing fraudulent activity. All data is publicly available and supports custom rating systems.

Verification of registration. For important transactions, the agent can request third-party verification—providing cryptographic-level behavioral credentials, similar to professional certification, through Trusted Execution Environment (TEE) oracles, staking inference, or zero-knowledge machine learning proofs.

For example, suppose you have an AI agent that needs to rebalance its portfolio by acquiring on-chain analytics data from other AI agents.

With x402, your agent can easily deposit $100 to apply for the service, but x402 cannot verify the reliability of the agent providing the service before payment is executed; ERC-8004, on the other hand, ensures transaction security through the following steps:

• The identity registry allows your AI agent to verify the analyst's NFT identity and scope of services;
• The reputation registry provides a record of positive reviews and completion rates linked to past x402 payments;
• Verify the registry to ensure the quality of the third-party verifier's certified report.

Once the verification record is uploaded to the blockchain, the escrow funds are automatically released, and a reputation rating is added. This process creates a "trusted, autonomous transaction" that x402 alone could not achieve.

x402 and ERC-8004 Ecology

In my previous article (https://x.com/eli5_defi/status/1978474979600879984), I provided a detailed explanation of the x402 ecosystem. The ERC-8004 infrastructure extends to multiple layers; some of these layers are listed below:

• Infrastructure: EigenCloud, Taiko, Eternal AI, NEAR, Phala Network
• Middleware: OpenServ, Unibase, Santa, Kinic AI, ChaosChain, NovaNet
• Application layer: Zyfai, Virtuals Protocol, Praxis, Cortensor, Semantic Layer

ERC-8004: More Than Just Finance

The financial sector is just the first step in "trustless agency," and the application scenarios of ERC-8004 extend far beyond financial transactions.

Creator Agency

Services include copywriting, social media management, community operations, translation, and image production. Selection criteria are based on reputation and client reviews.

Trading Agent

It supports decentralized on-chain delegation, enabling DeFi portfolio rebalancing and yield optimization. Staking validators audit transaction results, and losses from erroneous operations are compensated through a penalty mechanism.

Analyst Agent

We offer services such as market analysis, data crawling, tagging, and customer relationship management optimization. Leveraging TEE technology, we can perform calculations on private data from multiple organizations without exposing the original identifiers.

Game Agent

Create non-player characters across games, with persistent character designs and skills. Game invites and character appearances are assigned based on reputation proof.

Doctor Agent

Summarize electronic health record data, verify treatment guidelines, and draft medical records. Securely integrate laboratory data, imaging data, and pharmacy information using TEE technology, providing verifiable proof of implementation for auditing.

Personal clone

It employs privacy-preserving AI memory, encrypting and storing personal data in the cloud. Leveraging TEE technology, it achieves personalized services similar to centralized AI while ensuring privacy and security.

Insurance Agent

Automate the underwriting and claims process using large language models. Verifiers review decisions and evidence; erroneous decisions are penalized and refunded to users through forfeiture funds.

Schedule planning agent

Handle flight, hotel, and restaurant reservations and route optimization. Select service providers based on reputation to ensure cost-effectiveness.

Laboratory Agent

The experimental process is coordinated through hardware security mechanisms, data output results are signed, analysis is performed in the TEE environment, and verifiable and auditable results are returned.

Summarize

ERC-8004, proposed by Davide Crapis of the Ethereum Foundation, Marco De Rossi of MetaMask, Jordan Ellis of Google, and erik.eth of Coinbase (who is also the founder of x402), is an important supplement to the x402 protocol.

The combination of x402 and ERC-8004 demonstrates that technological advancements can effectively integrate payment systems with embedded on-chain verifiable trust to solve real-world problems. While some argue that x402 and ERC-8004 are merely part of a larger narrative of crypto-AI convergence, they do unlock practical inter-agent payment mechanisms, laying the foundation for large-scale applications.