# Transaction Processing

> **🚧 Development Status:** Transaction processing functionality is currently in active development and testing. This documentation describes the planned architecture and workflow. Features will be rolled out progressively as they become production-ready.


Transaction Processing module enables secure transaction creation, simulation, and signing orchestration. It acts as a bridge between transaction intent and blockchain execution, providing a hardware-wallet-like experience with comprehensive pre-execution analysis.

## Core Concept

The Transaction Processing module separates transaction logic into three distinct phases:

1. **Creation** - Build and validate transaction parameters
2. **Simulation** - Preview exactly what will happen before signing
3. **Execution** - Coordinate signing and broadcasting


This separation ensures users always understand transaction consequences before committing funds.

## How It Works


```mermaid
sequenceDiagram
    participant App as Your Application
    participant Vilna
    participant User as User Device
    participant Blockchain
    
    App->>Vilna: Create transaction
    Vilna->>Vilna: Build & validate
    Vilna->>Vilna: Simulate execution
    Vilna->>App: Return simulation results
    App->>User: Present simulation to user
    User->>User: Review & approve
    User->>App: Confirm transaction
    App->>Vilna: Request signing
    Vilna->>User: Send for signature
    User->>User: Sign locally
    User->>Vilna: Return signature
    Vilna->>Blockchain: Broadcast
    Blockchain->>Vilna: Confirmation
    Vilna->>App: Transaction complete
```

## Transaction Simulation

The most critical feature is transaction simulation - showing users exactly what will happen before they sign.

### What Simulation Provides

**Balance Changes:**

- Exact amounts leaving and entering each address
- Token movements including all affected tokens
- Gas costs in both native currency and USD


**Contract Effects:**

- Smart contract state changes
- Emitted events
- Token approvals being granted or consumed


**Risk Assessment:**

- Warnings about unusual activity
- Detection of potentially malicious contracts
- Slippage calculations for swaps


### Simulation Example

For a simple token swap, the simulation would show:


```
Before Transaction:
- Wallet: 10 ETH, 0 USDC

After Transaction:
- Wallet: 8.95 ETH, 3,500 USDC
- Gas cost: 0.05 ETH ($100)
- Price impact: 0.3%
- Route: ETH → WETH → USDC via Uniswap V3
```

## Supported Transaction Types

### Basic Transfers (Planned)

Simple sending of native tokens or ERC-20/BEP-20 tokens between addresses. The system will handle:

- Optimal gas calculation
- Nonce management
- Failed transaction recovery


### Token Swaps (In Development)

Integration with major DEX protocols for token exchanges:

- Automatic routing for best prices
- Slippage protection
- MEV protection strategies


### Smart Contract Interactions (Future)

General purpose contract calls with:

- ABI decoding for human-readable actions
- State change predictions
- Gas optimization


### Batch Operations (Roadmap)

Multiple actions in a single transaction for efficiency:

- Bulk transfers
- Complex DeFi strategies
- Gas cost optimization


## Security Architecture

### Transaction Integrity

Every transaction follows strict security protocols:

- **Validation** - All parameters verified before processing
- **Simulation** - Mandatory preview of effects
- **User Confirmation** - Explicit approval required
- **Signing Isolation** - Private keys never touch Vilna servers


### Signing Methods (Planned)

**External Wallets:**

- Integration with MetaMask, WalletConnect
- Hardware wallet support (Ledger, Trezor)
- Mobile wallet connections


**MPC Signing (Future):**

- Threshold signatures using MPC module
- No single point of failure
- Audit trail for all signing operations


## Real-World Applications

### Exchange Withdrawals

Exchanges can use the transaction module to process user withdrawals:

1. User initiates withdrawal in exchange UI
2. Exchange creates transaction via Vilna API
3. Simulation shows exact fees and arrival amount
4. Multi-signature approval from exchange operators
5. Automatic broadcasting and confirmation tracking


### DeFi Position Management

DeFi platforms can offer safe interaction with protocols:

1. User wants to add liquidity to a pool
2. Platform simulates the transaction showing:
  - Tokens being deposited
  - LP tokens received
  - Current pool APY
  - Impermanent loss risks
3. User approves with full understanding of outcomes


### Payment Processing

Payment gateways can offer refunds and payouts:

1. Merchant initiates refund
2. System calculates optimal gas settings
3. Simulation confirms customer will receive exact refund amount
4. Automatic execution with retry logic


## Integration Approach

### API-First Design

All transaction operations are available through REST API:

- Transaction creation with type-specific parameters
- Simulation endpoint returning detailed previews
- Signing orchestration with multiple methods
- Status tracking and confirmation monitoring


Relevant endpoints (when available):

- `POST /transactions/create` - Build new transaction
- `POST /transactions/simulate` - Get simulation results
- `POST /transactions/sign` - Initiate signing flow
- `GET /transactions/{id}/status` - Track execution


### Event-Driven Updates

Real-time notifications for transaction lifecycle:

- Creation confirmation
- Simulation completion
- Signature collection progress
- Broadcasting status
- Blockchain confirmations


## Current Limitations

As the module is under development, certain features are not yet available:

- Direct smart contract interactions are limited
- Not all DEX protocols are integrated
- Hardware wallet support is being tested
- Batch transactions are on the roadmap


## Safety Features

### Transaction Policies (Planned)

Define rules to prevent accidents and fraud:

- Daily spending limits
- Whitelist of allowed recipients
- Time-based restrictions
- Multi-approval requirements


### Automatic Safeguards

Built-in protections without configuration:

- Insufficient balance detection
- Extremely high gas warnings
- Malicious contract detection
- Reentrancy attack prevention


## Comparison with Direct Blockchain Interaction

### Traditional Approach

- Build raw transaction manually
- Estimate gas (often incorrectly)
- Sign without knowing effects
- Hope transaction succeeds
- Handle failures manually


### With Vilna Transaction Processing

- Structured transaction creation
- Accurate gas optimization
- Preview exact outcomes
- Confident execution
- Automatic retry and recovery


## Development Roadmap

### Currently Available

- Basic transaction structure
- Simulation framework
- Simple transfers (testing)


### In Development

- DEX integrations
- Enhanced simulation accuracy
- External wallet connections


### Future Plans

- Full smart contract support
- Cross-chain transactions
- Advanced MEV protection
- Transaction bundling


## Getting Started

While the full module is under development, you can:

1. Contact [support@vilna.io](mailto:support@vilna.io) for beta access
2. Test transaction simulation in sandbox environment
3. Provide feedback on desired features
4. Prepare your integration for upcoming release


## Key Takeaways

- **Safety First**: Every transaction is simulated before execution
- **User Control**: Users always see and approve transaction effects
- **No Private Keys**: Vilna never has access to signing keys
- **Progressive Release**: Features released as they're production-ready


## Next Steps

- [Architecture Overview](/guides/architecture-overview) - Understand how transactions fit in the platform
- [Core Platform](/guides/core) - Learn about address monitoring and data access
- [API Reference](/apis/spec) - Explore available endpoints