SETTLEMENT_IDEMPOTENCY_IMPLEMENTATION.md

Settlement Idempotency Implementation Summary

Task Overview

Objective: Improve src/routes/api/v1/postage/$messageId/settle.ts by addressing reliability gaps in settlement retries.

Problem: Settlement retries during network failures could double-resolve escrow state or produce conflicting responses.

Solution: Implement idempotency semantics with request correlation handling.

Acceptance Criteria Status

✅ Repeated settlement calls for the same message are deterministic

Implementation:

• Added X-Idempotency-Key header support to settlement endpoint
• Idempotency keys are hashed with SHA-256 and scoped per recipient (actor isolation)
• Cached responses (both success and terminal errors) are replayed for repeated calls
• Terminal state transitions (pending → settled, pending → refunded) produce consistent 409 errors

Evidence:

// From settle.ts
const rawIdempotencyKey = request.headers.get("x-idempotency-key");
if (rawIdempotencyKey) {
  const existing = await checkIdempotency(repository, current.recipient, rawIdempotencyKey);
  if (existing) {
    return apiSuccess(request, existing.body, {
      status: existing.status,
      headers: { "x-idempotency-replayed": "true" },
    });
  }
}

✅ Tests cover retry-after-success and retry-after-terminal-state cases

Test Coverage (from tests/unit/api/postage-settlement-idempotency.test.ts):

1. Retry after success:

   • "handles retry after successful settlement (same idempotency key)"
   • Verifies replayed response matches original
   • Confirms no double-settlement occurs

2. Retry after terminal state:

   • "returns deterministic error when settling already-settled postage"
   • "returns deterministic error when settling already-refunded postage"
   • "handles retry after terminal-state error (same idempotency key)"

3. Additional coverage:

   • Actor isolation tests
   • Network failure retry scenarios
   • Multiple operations with different keys
   • Data integrity across retries
   • Edge cases (missing postage, etc.)

Test Results: All 660 tests passing (including 17 new settlement idempotency tests)

✅ Response bodies explain terminal-state outcomes

Implementation (from postage-service.ts):

if (postage.status !== "pending") {
  const explanations: Record<string, string> = {
    settled:
      "Postage has already been settled. The escrow was previously released to the recipient.",
    refunded:
      "Postage has already been refunded. The escrow was previously returned to the sender.",
  };

  throw new ApiError(409, "conflict", explanation, {
    currentStatus: postage.status,
    attemptedStatus: status,
    messageId,
  });
}

Example Response:

{
  "error": {
    "code": "conflict",
    "message": "Postage has already been settled. The escrow was previously released to the recipient.",
    "details": {
      "currentStatus": "settled",
      "attemptedStatus": "settled",
      "messageId": "abc123..."
    }
  }
}

Implementation Details

Files Modified

1. src/routes/api/v1/postage/$messageId/settle.ts

   • Added idempotency key handling
   • Implemented response caching and replay
   • Added comprehensive documentation

2. src/server/api/postage-service.ts

   • Enhanced resolvePostage with detailed error messages
   • Improved terminal state explanations

3. protocol/vectors/vectors.json

   • Updated test vector to match new error message

Files Created

1. tests/unit/api/postage-settlement-idempotency.test.ts

   • 17 comprehensive test cases
   • Covers all retry scenarios
   • Validates actor isolation and security

2. docs/api/SETTLEMENT_IDEMPOTENCY.md

   • Complete idempotency documentation
   • Request flow diagrams
   • Client best practices
   • Security considerations

3. docs/api/README.md (updated)

   • Added idempotency section
   • References to detailed documentation

Verification

Build Status

✅ Build completed successfully with no errors

Test Status

✅ All 660 unit tests passing (59 test files)

• Existing postage service tests: ✅ Pass
• New idempotency tests: ✅ Pass
• Protocol vector tests: ✅ Pass (updated for new error message)

Key Test Scenarios Verified

Scenario	Status	Test Name
Settle pending postage	✅ Pass	resolvePostage - deterministic terminal states
Retry settled postage	✅ Pass	retry-after-success
Retry refunded postage	✅ Pass	retry-after-terminal-state
Actor isolation	✅ Pass	actor isolation tests
Network failure retries	✅ Pass	network failure scenarios
Multiple operations	✅ Pass	different keys for different operations
Data integrity	✅ Pass	preserves postage data across retries

Commits

1. f607e2c8 - feat: add idempotency support to postage settlement endpoint

   • Core implementation
   • Test suite
   • Error message improvements

2. c4700e40 - docs: add comprehensive settlement idempotency documentation

   • Complete documentation
   • Request flow diagrams
   • Client examples

Security Considerations

1. Actor Isolation: Keys are scoped per recipient using hash(actor:key)
2. Key Hashing: SHA-256 prevents key leakage in logs
3. No Cross-Actor Replay: Different recipients cannot replay each other's responses
4. Terminal Error Caching: Only 409 conflicts cached, not transient 500 errors

Performance Impact

• Idempotency check: O(1) cache lookup
• Recording: O(1) cache write
• Without key: No performance impact
• Storage: Same KV repository as postage state

Backward Compatibility

✅ Fully backward compatible:

• X-Idempotency-Key header is optional
• Existing clients without the header work unchanged
• No breaking API changes

Future Enhancements

Potential improvements for future iterations:

• TTL on cached idempotency records (e.g., 24 hours)
• Metrics for idempotency replay rates
• Support for refund endpoint idempotency
• OpenAPI spec updates

Conclusion

All acceptance criteria have been met:

• ✅ Deterministic settlement behavior
• ✅ Comprehensive test coverage for retry scenarios
• ✅ Clear, actionable error messages for terminal states
• ✅ Build and tests pass
• ✅ 2 commits made during implementation

The settlement endpoint now provides production-grade idempotency support, preventing double-settlement and ensuring safe retry behavior during network failures.