Implement Time-Based Expiration and Auto-Refund Mechanism

[johnsmccain]

Overview

This PR implements a time-lock refund mechanism that allows buyers to reclaim their funds when an escrow deadline expires without seller action. This feature protects buyers from unresponsive sellers while maintaining compatibility with existing dispute resolution and milestone release mechanisms.

Changes

Core Implementation

• New refund_expired function: Enables buyers to trigger refunds after deadline expiration
• New Expired status: Added to EscrowStatus enum to track refunded escrows
• New error types: Added 4 new error variants for comprehensive validation
  • DeadlineNotReached: Refund attempted before deadline
  • InvalidStatusForRefund: Escrow not in Active status
  • NoFundsToRefund: All funds already released
  • Unauthorized: Caller not authorized for refund

Key Features

1. Deadline Validation: Refunds only succeed when current ledger time exceeds escrow deadline
2. Status Checks: Only Active escrows can be refunded (prevents refunds on Disputed, Completed, or Cancelled escrows)
3. Authorization: Only the buyer (depositor) can trigger refunds
4. Partial Release Support: Correctly handles escrows with partial milestone releases
5. Platform Fee Integration: Applies existing BPS-based fee calculation to refunds
6. Event Emission: Emits RefundExpired events for off-chain tracking
7. State Management: Updates escrow status to Expired and marks all funds as released

Implementation Details

pub fn refund_expired(env: Env, escrow_id: u64, caller: Address) -> Result<(), Error>

Validation Flow:

1. Check escrow exists
2. Verify deadline has passed
3. Validate status is Active
4. Check remaining balance > 0
5. Verify caller authorization

Execution Flow:

1. Calculate remaining balance (amount - released_amount)
2. Calculate platform fee using BPS
3. Transfer refund to buyer
4. Transfer fee to treasury (if applicable)
5. Update escrow status to Expired
6. Emit RefundExpired event

Testing

Test Coverage

Implemented 10 comprehensive unit tests covering all correctness properties:

• ✅ Deadline enforcement: Refunds fail before deadline, succeed after
• ✅ Status validation: Only Active escrows can be refunded
• ✅ Authorization: Only buyer can trigger refunds
• ✅ Amount calculation: Correct refund with/without partial releases
• ✅ Balance zeroing: Remaining balance becomes zero after refund
• ✅ Fee calculation: Accurate BPS-based fee calculation
• ✅ Fee transfer: Treasury receives correct fee amount
• ✅ Status update: Escrow status changes to Expired
• ✅ Non-existent escrow: Proper error handling
• ✅ Edge cases: Zero fees, maximum fees, small amounts

Test Results

running 34 tests
test result: ok. 34 passed; 0 failed; 0 ignored

New Tests Added

1. test_refund_expired_successful_basic - Happy path with no partial releases
2. test_refund_expired_with_partial_releases - Refund with partial milestone releases
3. test_refund_expired_deadline_not_reached - Rejection before deadline
4. test_refund_expired_invalid_status - Rejection for Cancelled status
5. test_refund_expired_disputed_status - Rejection for Disputed status
6. test_refund_expired_completed_status - Rejection for Completed status
7. test_refund_expired_authorization_check - Authorization validation
8. test_refund_expired_no_funds_check - Rejection when all funds released
9. test_refund_expired_non_existent_escrow - Non-existent escrow handling
10. test_refund_expired_fee_calculation_edge_cases - Fee calculation edge cases

Security Considerations

• Access Control: Only buyer can trigger refunds (authorization enforced)
• State Consistency: All validations occur before state modifications
• Reentrancy Protection: Inherent protection from Soroban execution model
• Time Manipulation Resistance: Uses trusted blockchain timestamp
• Overflow Protection: All arithmetic uses checked operations

Backward Compatibility

• ✅ No breaking changes to existing API
• ✅ Existing escrow data structure unchanged (deadline field already exists)
• ✅ New Expired status doesn't affect existing status checks
• ✅ All existing functions continue working unchanged

Documentation

• Added comprehensive inline comments to complex logic
• Fee calculation function fully documented
• Refund function includes step-by-step comments

Requirements Satisfied

This implementation satisfies all 10 requirements from the specification:

1. ✅ Deadline expiration detection
2. ✅ Refund eligibility validation
3. ✅ Fund transfer execution
4. ✅ Platform fee handling
5. ✅ Escrow status update
6. ✅ Event emission
7. ✅ Access control
8. ✅ Error handling
9. ✅ Partial release compatibility
10. ✅ Storage and state management

Related Documentation

• Requirements: .kiro/specs/escrow-time-lock-refund/requirements.md
• Design: .kiro/specs/escrow-time-lock-refund/design.md
• Tasks: .kiro/specs/escrow-time-lock-refund/tasks.md

Checklist

• Implementation complete
• All tests passing
• Code documented with inline comments
• No breaking changes
• Security considerations addressed
• Error handling comprehensive
• Backward compatible

Next Steps

After merge, consider:

• Adding property-based tests for exhaustive validation
• Implementing integration tests for cross-component interactions
• Adding grace period configuration option
• Implementing automatic refund keeper system

Close #35

[Cedarich]

Kindly address formatting errors

[johnsmccain]

okay

[johnsmccain]

Done