Introduction
🔹 What is Latch?
Latch is an open payment layer that brings x402 micropayments to any Model Context Protocol (MCP) server. It extends the MCP ecosystem with on-chain settlement — allowing agents, tools, and applications to pay per use automatically and transparently.
With Latch, both AI clients and developers can transact value directly, without subscriptions, API keys, or centralized billing.
⚡ Why Latch (in 30 seconds)
For Clients → Pay only for what you use. No API keys, no monthly plans — just instant, per-call payments through MCP-compatible apps like ChatGPT, Cursor, or your own agents.
For Developers → Monetize your tools effortlessly. Register your MCP server, set flexible pricing (per call, per token, or dynamic tiers), and receive on-chain payments in real time.
For Agents → Enable true autonomous commerce. Agents can now make or receive payments for API access, inference, or data — using the open x402 protocol.
🔁 How it Works
Latch handles the full x402 payment flow between MCP clients and servers:
Publishes structured pricing metadata through x402 headers.
Verifies and settles on-chain transactions automatically before resuming execution.
Streams usage and revenue events to dashboards or external analytics endpoints.
This makes any MCP-compatible application instantly pay-aware, enabling machine-to-machine payments without refactoring or custom integration.
Request Flow Overview
1. Client sends MCP request
2. Latch Proxy forwards it upstream
3. Upstream service responds with 402 Payment Required + structured pricing metadata
4. Proxy (or the client, depending on policy) initiates an on-chain payment in USDC or EUROe
5. Once confirmed, the proxy automatically retries the original MCP request
6. The response is streamed back to the client, along with telemetry and payment receipts
During the process, Latch emits usage and revenue events to connected dashboards or analytics systems — allowing real-time monitoring of paid interactions.
Architecture Snapshot
Client Proxy + Wallet — Handles signing, authorization, and delegated payment policies.
Latch Proxy (Edge) — The coordination layer that performs 402 negotiation and automatic settlement.
Upstream Service (MCP / API / Model) — The actual pay-per-call target endpoint.
Blockchain Layer (USDC / EUROe) — Processes and confirms x402 payments.
Analytics / Dashboard — Visualizes requests, usage, and on-chain revenue in real time.
In practice, this means any MCP server can be made payment-aware instantly — no refactor, no SDK lock-in, and no centralized billing. Once payment is confirmed, Latch automatically resumes the request and streams the final result back to the user, maintaining a completely transparent flow from call → payment → response.
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