Smart Contracts

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Overview

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Traditional x402 vs Meridian’s Innovation

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Standard x402 (Coinbase Model)

Payer signs authorization → Direct transfer to recipient wallet

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Meridian’s Proxy Facilitator Model

Payer signs authorization → Proxy receives funds → Tracks receiver balances → Controlled withdrawals with fees

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Key Components

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Smart Contract: X402ProxyFacilitator.sol

0x3a8AB86Cd37A61088ADdA1CA624245957317e2Ff

• Proxy Architecture: All payments flow through the facilitator contract, not directly to recipients
• Receiver Balance Tracking: mapping(address => uint256) public recipientBalances
• Controlled Withdrawals: Recipients must call withdraw() or withdrawAll() to access funds
• Fee Collection: 1% fee applied at withdrawal time, not on initial transfer
• Organization Integration: Payments linked to organizations for multi-user management

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Backend Infrastructure

• Organization Management: Users belong to organizations with shared payment infrastructure
• API Key Authentication: Organization-scoped API keys for payment verification
• Transaction Tracking: Complete audit trail of payments, settlements, and withdrawals
• Multi-User Access: Teams can manage payments collectively through organization structure

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How x402 Works

1. Authorization Signing: Payer signs a message with payment details (amount, recipient, network).
2. Verification: Server verifies signature and authorization parameters.
3. Transfer Execution: Uses transferWithAuthorization on the USDC contract via the facilitator.
4. Fee Application: 1% fee deducted to treasury; remainder to recipient.

const message = `X402 Payment Authorization
Amount: ${amount} USDC
Recipient: ${recipient}
Network: ${network}`;

const signature = await signMessageAsync({ message });

// Send to /api/x402/verify

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Meridian’s Unique Architecture

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1. Proxy Facilitator Contract

function transferWithAuthorization(
    address from,
    address, // to parameter ignored - proxy always receives
    uint256 value,
    // ... other params
    address recipient // Meridian addition: actual recipient tracked separately
) external {
    // Forward to USDC contract with proxy as recipient
    IFiatTokenV2(usdcContract).transferWithAuthorization(
        from,
        address(this), // Proxy always receives the funds
        value,
        // ... other params
    );

    // Track recipient balance in Meridian's system
    recipientBalances[recipient] += value;
}

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2. Organization-Scoped Management

• Multi-User Organizations: Teams share payment infrastructure
• API Key Management: Organization-scoped authentication
• Shared Analytics: Transaction tracking across team members
• Controlled Access: Organization admins manage payment permissions

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3. Controlled Withdrawal System

function withdraw(uint256 amount) external {
    require(recipientBalances[msg.sender] >= amount, "Insufficient recipient balance");

    // Calculate treasury fee (1% on withdrawal, not transfer)
    uint256 treasuryFee = (amount * FEE_BASIS_POINTS) / BASIS_POINTS_DIVISOR;
    uint256 amountAfterFee = amount - treasuryFee;

    // Update tracked balance
    recipientBalances[msg.sender] -= amount;

    // Transfer actual USDC to recipient
    IERC20(usdcContract).transfer(msg.sender, amountAfterFee);
    IERC20(usdcContract).transfer(treasury, treasuryFee);
}

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4. Enhanced Security Layer

• Organization Management: Users belong to organizations with shared infrastructure
• API Key Authentication: Secure, organization-scoped access control
• Multi-User Teams: Collaborative payment management without wallet sharing
• Audit Trail: Complete transaction history and analytics

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Why This Architecture Matters

• Simplified Integration: One API for complex payment flows
• Built-in Analytics: Organization-level transaction tracking
• Team Management: Multi-user access without wallet sharing
• Fee Optimization: Fees on withdrawals, not every transfer

• Autonomous Operations: Agents can receive payments without immediate wallet access
• Batch Processing: Accumulate payments before withdrawal
• Organization Security: API key management prevents unauthorized access
• Framework Agnostic: Works with any AI agent framework