diff --git a/.gitignore b/.gitignore
index 81bbc2b..14ad881 100644
--- a/.gitignore
+++ b/.gitignore
@@ -33,3 +33,4 @@ temp/
 # OS generated files
 .DS_Store
 Thumbs.db
+TEMP_TODO.md
diff --git a/html/index.html b/html/index.html
index 443cbea..219f495 100644
--- a/html/index.html
+++ b/html/index.html
@@ -73,6 +73,7 @@
     <script src="js/ui/transactionHistory.js"></script>
     <script src="js/ui/helpModal.js"></script>
     <script src="js/network/socketHandlers.js"></script>
+    <script src="js/network/smirkAuth.js"></script>
     <script src="js/input/inputHandler.js"></script>
 </head>
 <body>
diff --git a/html/js/network/smirkAuth.js b/html/js/network/smirkAuth.js
new file mode 100644
index 0000000..2ce8789
--- /dev/null
+++ b/html/js/network/smirkAuth.js
@@ -0,0 +1,298 @@
+/**
+ * SmirkAuth - Smirk Wallet Authentication Module
+ *
+ * Handles "Login with Smirk" wallet integration for Wownerogue.
+ * Uses the Smirk browser extension API (window.smirk) for wallet interactions.
+ *
+ * Flow:
+ * 1. Get challenge from server
+ * 2. Connect to Smirk extension to get public keys
+ * 3. Sign challenge with wallet
+ * 4. Verify signature with backend
+ * 5. Auto-set payout address from wallet
+ */
+
+const SmirkAuth = {
+    /**
+     * Check if Smirk extension is installed
+     */
+    isAvailable() {
+        return typeof window.smirk !== 'undefined';
+    },
+
+    /**
+     * Current link status
+     */
+    _isLinked: false,
+    _walletAddress: null,
+
+    /**
+     * Main login flow
+     */
+    async login() {
+        if (!this.isAvailable()) {
+            throw new Error('Smirk extension not installed. Please install it from your browser extension store.');
+        }
+
+        if (!window.socket || !window.socket.id) {
+            throw new Error('Not connected to server. Please wait for connection.');
+        }
+
+        const socketId = window.socket.id;
+
+        // Step 1: Get challenge from server
+        const challengeRes = await fetch('/api/auth/smirk/challenge', {
+            method: 'POST',
+            headers: { 'Content-Type': 'application/json' },
+            body: JSON.stringify({ socketId })
+        });
+
+        if (!challengeRes.ok) {
+            const error = await challengeRes.json();
+            throw new Error(error.message || 'Failed to get challenge from server');
+        }
+
+        const { challenge } = await challengeRes.json();
+
+        // Step 2: Connect to Smirk extension
+        let keys;
+        try {
+            keys = await window.smirk.connect();
+        } catch (smirkError) {
+            throw new Error('Failed to connect to Smirk wallet: ' + (smirkError.message || 'Unknown error'));
+        }
+
+        if (!keys || !keys.wow) {
+            throw new Error('Smirk wallet did not return a WOW address');
+        }
+
+        // Step 3: Sign the challenge
+        let signResult;
+        try {
+            signResult = await window.smirk.signMessage(challenge);
+        } catch (signError) {
+            throw new Error('Failed to sign challenge: ' + (signError.message || 'Unknown error'));
+        }
+
+        // Find WOW signature
+        const wowSig = signResult.signatures?.find(s => s.asset === 'wow');
+        if (!wowSig) {
+            throw new Error('WOW signature not found in Smirk response');
+        }
+
+        // Step 4: Verify signature with backend
+        const verifyRes = await fetch('/api/auth/smirk/verify', {
+            method: 'POST',
+            headers: { 'Content-Type': 'application/json' },
+            body: JSON.stringify({
+                socketId,
+                challenge,
+                publicKey: wowSig.publicKey,
+                signature: wowSig.signature
+            })
+        });
+
+        if (!verifyRes.ok) {
+            const error = await verifyRes.json();
+            throw new Error(error.message || 'Signature verification failed');
+        }
+
+        const verifyData = await verifyRes.json();
+
+        // Step 5: Auto-set payout address from wallet
+        if (keys.wow && window.socket) {
+            window.socket.emit('address:update', { address: keys.wow });
+        }
+
+        // Update internal state
+        this._isLinked = true;
+        this._walletAddress = keys.wow;
+
+        return {
+            success: true,
+            linked: verifyData.linked,
+            address: keys.wow
+        };
+    },
+
+    /**
+     * Check current link status
+     */
+    async checkStatus() {
+        if (!window.socket || !window.socket.id) {
+            return { linked: false, hasPayoutAddress: false };
+        }
+
+        try {
+            const res = await fetch(`/api/auth/smirk/status?socketId=${encodeURIComponent(window.socket.id)}`);
+            if (res.ok) {
+                const data = await res.json();
+                this._isLinked = data.linked;
+                return data;
+            }
+        } catch (e) {
+            console.warn('Failed to check Smirk status:', e.message);
+        }
+
+        return { linked: false, hasPayoutAddress: false };
+    },
+
+    /**
+     * Create and return the Smirk login button element
+     */
+    _createButton() {
+        const btn = $('<button id="smirkLoginBtn" class="menu-button">')
+            .css({
+                'background': '#1a1a4d',
+                'color': '#fff',
+                'border': '1px solid #3a3a7d',
+                'margin-top': '5px',
+                'cursor': 'pointer',
+                'font-size': '12px',
+                'padding': '8px 12px',
+                'width': '100%',
+                'text-align': 'center'
+            })
+            .text('Connect Smirk Wallet');
+
+        return btn;
+    },
+
+    /**
+     * Update button state
+     */
+    _updateButton(btn, state) {
+        switch (state) {
+            case 'connecting':
+                btn.prop('disabled', true)
+                   .css({ 'background': '#2a2a5d', 'cursor': 'wait' })
+                   .text('Connecting...');
+                break;
+            case 'connected':
+                btn.prop('disabled', true)
+                   .css({ 'background': '#0a5c0a', 'border-color': '#0a8c0a', 'cursor': 'default' })
+                   .text('Smirk Connected');
+                break;
+            case 'error':
+                btn.prop('disabled', false)
+                   .css({ 'background': '#5c0a0a', 'border-color': '#8c0a0a', 'cursor': 'pointer' })
+                   .text('Retry Smirk Connect');
+                break;
+            default: // 'ready'
+                btn.prop('disabled', false)
+                   .css({ 'background': '#1a1a4d', 'border-color': '#3a3a7d', 'cursor': 'pointer' })
+                   .text('Connect Smirk Wallet');
+        }
+    },
+
+    /**
+     * Handle button click
+     */
+    async _handleClick(btn) {
+        this._updateButton(btn, 'connecting');
+
+        try {
+            const result = await this.login();
+
+            this._updateButton(btn, 'connected');
+
+            // Show success message in chat
+            if (typeof SocketHandlers !== 'undefined' && SocketHandlers._appendMessage) {
+                SocketHandlers._appendMessage('status', 'Smirk wallet connected! Payout address set.');
+            } else {
+                $('#messages').append($('<li class="status">').text('Smirk wallet connected! Payout address set.'));
+            }
+
+            // Update address button status if available
+            if (typeof SocketHandlers !== 'undefined' && SocketHandlers._updateAddressButtonStatus) {
+                SocketHandlers._updateAddressButtonStatus(true);
+            }
+
+            return result;
+
+        } catch (err) {
+            console.error('Smirk login failed:', err);
+            this._updateButton(btn, 'error');
+
+            // Show error message
+            const errorMsg = 'Smirk login failed: ' + err.message;
+            if (typeof SocketHandlers !== 'undefined' && SocketHandlers._appendMessage) {
+                SocketHandlers._appendMessage('error', errorMsg);
+            } else {
+                $('#messages').append($('<li class="error">').text(errorMsg));
+            }
+
+            throw err;
+        }
+    },
+
+    /**
+     * Initialize the Smirk button in the UI
+     * Should be called after DOM is ready and socket is connected
+     */
+    init() {
+        // Only show button if Smirk extension is available
+        if (!this.isAvailable()) {
+            console.log('Smirk extension not detected, button will not be shown');
+            return;
+        }
+
+        // Check if button already exists
+        if ($('#smirkLoginBtn').length > 0) {
+            return;
+        }
+
+        // Create button
+        const btn = this._createButton();
+
+        // Add click handler
+        btn.on('click', () => this._handleClick(btn));
+
+        // Insert after the address button (if it exists) or after the help button
+        const addressBtn = $('#manageAddressButton');
+        if (addressBtn.length > 0) {
+            addressBtn.after(btn);
+        } else {
+            const helpBtn = $('#helpButton');
+            if (helpBtn.length > 0) {
+                helpBtn.after(btn);
+            } else {
+                // Fallback: append to status area
+                $('#status').append(btn);
+            }
+        }
+
+        // Check if already linked on page load
+        this.checkStatus().then(status => {
+            if (status.linked) {
+                this._updateButton(btn, 'connected');
+            }
+        });
+
+        console.log('Smirk authentication module initialized');
+    }
+};
+
+// Auto-initialize when DOM is ready
+$(document).ready(function() {
+    // Wait a short moment for socket to connect before initializing
+    setTimeout(() => {
+        SmirkAuth.init();
+    }, 1000);
+});
+
+// Also re-check when socket connects (in case of reconnection)
+if (typeof window.socket !== 'undefined') {
+    window.socket.on('connect', function() {
+        setTimeout(() => {
+            if (SmirkAuth.isAvailable() && !SmirkAuth._isLinked) {
+                SmirkAuth.checkStatus().then(status => {
+                    const btn = $('#smirkLoginBtn');
+                    if (btn.length > 0 && status.linked) {
+                        SmirkAuth._updateButton(btn, 'connected');
+                    }
+                });
+            }
+        }, 500);
+    });
+}
diff --git a/src/db/databaseManager.js b/src/db/databaseManager.js
index 73ce2e4..39285a8 100644
--- a/src/db/databaseManager.js
+++ b/src/db/databaseManager.js
@@ -218,6 +218,27 @@ class DatabaseManager {
         return await this.pool.connect();
     }
 
+    /**
+     * Execute a callback within a database transaction
+     * Automatically handles BEGIN, COMMIT, and ROLLBACK
+     * @param {Function} callback - Async function that receives the client
+     * @returns {Promise<any>} - Result from the callback
+     */
+    async withTransaction(callback) {
+        const client = await this.getClient();
+        try {
+            await client.query('BEGIN');
+            const result = await callback(client);
+            await client.query('COMMIT');
+            return result;
+        } catch (error) {
+            await client.query('ROLLBACK');
+            throw error;
+        } finally {
+            client.release();
+        }
+    }
+
     /**
      * Close database connection
      */
diff --git a/src/game/gameModeManager.js b/src/game/gameModeManager.js
index e4b319d..98c083e 100644
--- a/src/game/gameModeManager.js
+++ b/src/game/gameModeManager.js
@@ -797,7 +797,26 @@ class GameModeManager {
             if (payoutEligibleMode && outcome === 'escaped' && game.payout_address) {
                 const { amount: payoutAmount, multiplier } = this.calculatePayout(recordedMode, { treasureFound });
                 if (payoutAmount > 0) {
+                    const reason = treasureFound ? 'escape_with_treasure' : 'escape';
+                    let payoutId = null;
+
                     try {
+                        // Step 1: Create pending payout record FIRST (ensures we have a record even if RPC succeeds but server crashes)
+                        const insertResult = await this.db.query(`
+                            INSERT INTO payouts (user_id, game_id, payout_address, amount, multiplier, reason, status, created_at)
+                            VALUES ($1, $2, $3, $4, $5, $6, 'pending', NOW())
+                            RETURNING id
+                        `, [
+                            game.user_id,
+                            gameId,
+                            game.payout_address,
+                            payoutAmount,
+                            multiplier,
+                            reason
+                        ]);
+                        payoutId = insertResult.rows[0].id;
+
+                        // Step 2: Attempt wallet RPC transfer
                         const payoutResult = await this.walletService.processPayout({
                             userId: game.user_id,
                             gameId,
@@ -807,52 +826,75 @@ class GameModeManager {
                             description: `Game ${gameId} payout`
                         });
 
-                        // Record payout in database
-                        const reason = treasureFound ? 'escape_with_treasure' : 'escape';
-                        await this.db.query(`
-                            INSERT INTO payouts (user_id, game_id, payout_address, amount, multiplier, reason, status, tx_hash, fee, created_at, processed_at)
-                            VALUES ($1, $2, $3, $4, $5, $6, $7, $8, $9, NOW(), NOW())
-                        `, [
-                            game.user_id,
-                            gameId,
-                            game.payout_address,
-                            payoutAmount,
-                            multiplier,
-                            reason,
-                            payoutResult.success ? 'completed' : 'failed',
-                            payoutResult.txHash || null,
-                            payoutResult.fee || null
-                        ]);
-
-                        // Update user's total_amount_won
-                        if (payoutResult.success) {
+                        // Step 3: IMMEDIATELY store tx_hash if RPC succeeded (BEFORE transaction)
+                        // This ensures we never lose the tx_hash even if subsequent DB operations fail
+                        // The retry service can then check blockchain status using this hash
+                        if (payoutResult.success && payoutResult.txHash) {
                             await this.db.query(`
-                                UPDATE users
-                                SET total_amount_won = COALESCE(total_amount_won, 0) + $1,
-                                    total_payouts_received = COALESCE(total_payouts_received, 0) + 1
-                                WHERE id = $2
-                            `, [payoutAmount, game.user_id]);
+                                UPDATE payouts
+                                SET tx_hash = $1, fee = $2
+                                WHERE id = $3
+                            `, [payoutResult.txHash, payoutResult.fee || null, payoutId]);
                         }
 
+                        // Step 4: Update status and user stats (within transaction for atomicity)
+                        await this.db.withTransaction(async (client) => {
+                            await client.query(`
+                                UPDATE payouts
+                                SET status = $1, processed_at = NOW()
+                                WHERE id = $2
+                            `, [
+                                payoutResult.success ? 'completed' : 'failed',
+                                payoutId
+                            ]);
+
+                            // Update user's total_amount_won if successful
+                            if (payoutResult.success) {
+                                await client.query(`
+                                    UPDATE users
+                                    SET total_amount_won = COALESCE(total_amount_won, 0) + $1,
+                                        total_payouts_received = COALESCE(total_payouts_received, 0) + 1
+                                    WHERE id = $2
+                                `, [payoutAmount, game.user_id]);
+                            }
+                        });
+
                         console.log(`💸 Payout ${payoutResult.success ? 'sent' : 'failed'}: ${payoutAmount} atomic units for game ${gameId} (multiplier ${multiplier}x)`);
                     } catch (payoutError) {
                         console.error(`❌ Payout processing failed for game ${gameId}:`, payoutError.message);
-                        // Record failed payout attempt
-                        try {
-                            await this.db.query(`
-                                INSERT INTO payouts (user_id, game_id, payout_address, amount, multiplier, reason, status, error_message, created_at)
-                                VALUES ($1, $2, $3, $4, $5, $6, 'failed', $7, NOW())
-                            `, [
-                                game.user_id,
-                                gameId,
-                                game.payout_address,
-                                payoutAmount,
-                                multiplier,
-                                treasureFound ? 'escape_with_treasure' : 'escape',
-                                payoutError.message
-                            ]);
-                        } catch (dbErr) {
-                            console.error('Failed to record payout error:', dbErr.message);
+                        // Update payout record with failure (if it exists)
+                        if (payoutId) {
+                            try {
+                                await this.db.query(`
+                                    UPDATE payouts
+                                    SET status = 'failed',
+                                        error_message = $1,
+                                        retry_count = COALESCE(retry_count, 0),
+                                        last_error = $1,
+                                        last_retry_at = NOW()
+                                    WHERE id = $2
+                                `, [payoutError.message, payoutId]);
+                            } catch (dbErr) {
+                                console.error('Failed to update payout error:', dbErr.message);
+                            }
+                        } else {
+                            // Payout record wasn't created, insert failed record
+                            try {
+                                await this.db.query(`
+                                    INSERT INTO payouts (user_id, game_id, payout_address, amount, multiplier, reason, status, error_message, created_at)
+                                    VALUES ($1, $2, $3, $4, $5, $6, 'failed', $7, NOW())
+                                `, [
+                                    game.user_id,
+                                    gameId,
+                                    game.payout_address,
+                                    payoutAmount,
+                                    multiplier,
+                                    reason,
+                                    payoutError.message
+                                ]);
+                            } catch (dbErr) {
+                                console.error('Failed to record payout error:', dbErr.message);
+                            }
                         }
                     }
                 }
diff --git a/src/index.js b/src/index.js
index a2fb512..3902b9e 100644
--- a/src/index.js
+++ b/src/index.js
@@ -1,5 +1,6 @@
 const express = require('express');
 const path = require('path');
+const crypto = require('crypto');
 var app = express();
 var http = require('http').Server(app);
 var io = require('socket.io')(http);
@@ -10,6 +11,7 @@ require('dotenv').config();
 // Import payment system components
 const DatabaseManager = require('./db/databaseManager');
 const WalletRPCService = require('./payments/walletRPCService');
+const PayoutRetryService = require('./payments/payoutRetryService');
 const GameModeManager = require('./game/gameModeManager');
 const RpcService = require('./rpc/rpcService');
 const PaymentConfigManager = require('./config/paymentConfig');
@@ -417,6 +419,169 @@ app.get('/api/user/:socketId/payouts', asyncHandler(async (req, res) => {
   }
 }));
 
+// =============================================================================
+// Smirk Wallet Authentication Endpoints
+// =============================================================================
+
+/**
+ * POST /api/auth/smirk/challenge
+ * Generate a challenge for Smirk wallet signature verification
+ * Body: { socketId: string }
+ */
+app.post('/api/auth/smirk/challenge', asyncHandler(async (req, res) => {
+  const { socketId } = req.body || {};
+
+  if (!socketId || typeof socketId !== 'string') {
+    throw new ValidationError('Missing socketId', {
+      safeMessage: 'socketId is required to generate a challenge.'
+    });
+  }
+
+  // Generate a cryptographically secure challenge
+  const challenge = crypto.randomBytes(32).toString('hex');
+
+  // Store challenge in database (expires in 5 minutes)
+  await db.query(`
+    INSERT INTO smirk_challenges (challenge, socket_id)
+    VALUES ($1, $2)
+  `, [challenge, socketId]);
+
+  // Clean up old/expired challenges periodically
+  await db.query(`
+    DELETE FROM smirk_challenges
+    WHERE expires_at < NOW() OR (used = TRUE AND created_at < NOW() - INTERVAL '1 hour')
+  `);
+
+  res.json({
+    challenge,
+    expiresIn: 300 // 5 minutes in seconds
+  });
+}));
+
+/**
+ * POST /api/auth/smirk/verify
+ * Verify a Smirk wallet signature and link to user session
+ * Body: { socketId: string, challenge: string, publicKey: string, signature: string }
+ */
+app.post('/api/auth/smirk/verify', asyncHandler(async (req, res) => {
+  const { socketId, challenge, publicKey, signature } = req.body || {};
+
+  if (!socketId || !challenge || !publicKey || !signature) {
+    throw new ValidationError('Missing required fields', {
+      safeMessage: 'socketId, challenge, publicKey, and signature are required.'
+    });
+  }
+
+  // 1. Verify challenge exists, is not used, and has not expired
+  const challengeResult = await db.query(`
+    SELECT * FROM smirk_challenges
+    WHERE challenge = $1 AND socket_id = $2 AND used = FALSE AND expires_at > NOW()
+  `, [challenge, socketId]);
+
+  if (challengeResult.rows.length === 0) {
+    throw new ValidationError('Invalid or expired challenge', {
+      safeMessage: 'The challenge is invalid, expired, or has already been used.'
+    });
+  }
+
+  // 2. Mark challenge as used immediately (prevent replay attacks)
+  await db.query(`
+    UPDATE smirk_challenges SET used = TRUE WHERE id = $1
+  `, [challengeResult.rows[0].id]);
+
+  // 3. Verify signature using tweetnacl
+  // The signature should be the challenge signed by the wallet's private key
+  let isValidSignature = false;
+  try {
+    const nacl = require('tweetnacl');
+    const challengeBytes = Buffer.from(challenge, 'hex');
+    const signatureBytes = Buffer.from(signature, 'hex');
+    const publicKeyBytes = Buffer.from(publicKey, 'hex');
+
+    // tweetnacl.sign.detached.verify(message, signature, publicKey)
+    isValidSignature = nacl.sign.detached.verify(challengeBytes, signatureBytes, publicKeyBytes);
+  } catch (verifyError) {
+    console.error('Signature verification error:', verifyError.message);
+    throw new ValidationError('Signature verification failed', {
+      safeMessage: 'Unable to verify the wallet signature.'
+    });
+  }
+
+  if (!isValidSignature) {
+    throw new ValidationError('Invalid signature', {
+      safeMessage: 'The wallet signature is invalid.'
+    });
+  }
+
+  // 4. Link public key to user session
+  const userResult = await db.query(`
+    SELECT id FROM users WHERE socket_id = $1
+  `, [socketId]);
+
+  if (userResult.rows.length === 0) {
+    throw new NotFoundError('User session not found', {
+      safeMessage: 'No active session found. Please connect to the game first.'
+    });
+  }
+
+  const userId = userResult.rows[0].id;
+
+  // Check if this public key is already linked to another user
+  const existingLink = await db.query(`
+    SELECT id FROM users WHERE smirk_public_key = $1 AND id != $2
+  `, [publicKey, userId]);
+
+  if (existingLink.rows.length > 0) {
+    throw new ValidationError('Wallet already linked', {
+      safeMessage: 'This wallet is already linked to another account.'
+    });
+  }
+
+  // Link the wallet to this user
+  await db.query(`
+    UPDATE users SET smirk_public_key = $1 WHERE id = $2
+  `, [publicKey, userId]);
+
+  res.json({
+    success: true,
+    linked: true,
+    message: 'Smirk wallet linked successfully'
+  });
+}));
+
+/**
+ * GET /api/auth/smirk/status
+ * Check if a session has a linked Smirk wallet
+ * Query: socketId=string
+ */
+app.get('/api/auth/smirk/status', asyncHandler(async (req, res) => {
+  const { socketId } = req.query;
+
+  if (!socketId) {
+    throw new ValidationError('Missing socketId', {
+      safeMessage: 'socketId query parameter is required.'
+    });
+  }
+
+  const result = await db.query(`
+    SELECT smirk_public_key, payout_address FROM users WHERE socket_id = $1
+  `, [socketId]);
+
+  if (result.rows.length === 0) {
+    res.json({
+      linked: false,
+      hasPayoutAddress: false
+    });
+    return;
+  }
+
+  const user = result.rows[0];
+  res.json({
+    linked: !!user.smirk_public_key,
+    hasPayoutAddress: !!user.payout_address
+  });
+}));
+
 // =============================================================================
 // Admin API Endpoints (requires ADMIN_API_KEY)
 // =============================================================================
@@ -435,8 +600,10 @@ const adminAuth = (req, res, next) => {
   }
   
   const providedKey = req.headers['x-admin-key'];
-  if (!providedKey || providedKey !== adminKey) {
-    return res.status(401).json({ 
+  if (!providedKey ||
+      providedKey.length !== adminKey.length ||
+      !crypto.timingSafeEqual(Buffer.from(providedKey), Buffer.from(adminKey))) {
+    return res.status(401).json({
       error: 'Unauthorized',
       message: 'Invalid or missing X-Admin-Key header.'
     });
@@ -976,6 +1143,18 @@ async function startServer() {
                     console.error('Error in batch payout processing:', error);
                 }
             }, payoutIntervalMs);
+
+            // Start payout retry service for failed/stuck payouts
+            const maxRetries = Number(process.env.PAYOUT_MAX_RETRIES) || 3;
+            const retryIntervalMs = Number(process.env.PAYOUT_RETRY_INTERVAL_MS) || 300000; // 5 minutes
+            const payoutRetryService = new PayoutRetryService({
+                db: databaseManager,
+                walletService: walletRPCService,
+                debugManager,
+                maxRetries,
+                retryIntervalMs
+            });
+            payoutRetryService.start();
         }
         
     } catch (error) {
diff --git a/src/migrations/008_tx_hash_unique.sql b/src/migrations/008_tx_hash_unique.sql
new file mode 100644
index 0000000..5981bec
--- /dev/null
+++ b/src/migrations/008_tx_hash_unique.sql
@@ -0,0 +1,12 @@
+-- Migration 008: Add UNIQUE constraints on tx_hash for idempotency
+-- Prevents duplicate transaction processing which could lead to double-crediting or double-payouts
+
+-- Unique constraint on payments.tx_hash (partial index - only non-null values)
+CREATE UNIQUE INDEX IF NOT EXISTS idx_payments_tx_hash_unique
+ON payments(tx_hash)
+WHERE tx_hash IS NOT NULL;
+
+-- Unique constraint on payouts.tx_hash (partial index - only non-null values)
+CREATE UNIQUE INDEX IF NOT EXISTS idx_payouts_tx_hash_unique
+ON payouts(tx_hash)
+WHERE tx_hash IS NOT NULL;
diff --git a/src/migrations/009_smirk_integration.sql b/src/migrations/009_smirk_integration.sql
new file mode 100644
index 0000000..5f9cfd2
--- /dev/null
+++ b/src/migrations/009_smirk_integration.sql
@@ -0,0 +1,33 @@
+-- Migration 009: Smirk wallet integration
+-- Adds support for "Login with Smirk" wallet authentication
+
+-- Add Smirk public key to users table
+ALTER TABLE users
+ADD COLUMN IF NOT EXISTS smirk_public_key VARCHAR(128);
+
+-- Unique constraint on Smirk public key (one wallet per user account)
+CREATE UNIQUE INDEX IF NOT EXISTS idx_users_smirk_public_key
+ON users(smirk_public_key)
+WHERE smirk_public_key IS NOT NULL;
+
+-- Challenge storage for authentication flow
+-- Challenges expire after 5 minutes and are single-use
+CREATE TABLE IF NOT EXISTS smirk_challenges (
+    id SERIAL PRIMARY KEY,
+    challenge VARCHAR(64) NOT NULL UNIQUE,
+    socket_id VARCHAR(255) NOT NULL,
+    created_at TIMESTAMP DEFAULT NOW(),
+    expires_at TIMESTAMP DEFAULT (NOW() + INTERVAL '5 minutes'),
+    used BOOLEAN DEFAULT FALSE
+);
+
+-- Index for looking up challenges by socket
+CREATE INDEX IF NOT EXISTS idx_smirk_challenges_socket
+ON smirk_challenges(socket_id);
+
+-- Index for cleanup of expired challenges
+CREATE INDEX IF NOT EXISTS idx_smirk_challenges_expires
+ON smirk_challenges(expires_at);
+
+-- Cleanup function for expired challenges (run periodically)
+-- DELETE FROM smirk_challenges WHERE expires_at < NOW() OR used = TRUE;
diff --git a/src/network/chatHandler.js b/src/network/chatHandler.js
index b2c48a4..48ad361 100644
--- a/src/network/chatHandler.js
+++ b/src/network/chatHandler.js
@@ -236,8 +236,14 @@ class ChatHandler {
 
         this._chatLastSent.set(socket.id, now);
 
-        // Very light sanitization (escape < >)
-        const safe = trimmed.replace(/[<>]/g, c => c === '<' ? '&lt;' : '&gt;').slice(0, 300);
+        // Complete HTML entity escaping to prevent XSS
+        const safe = trimmed
+            .replace(/&/g, '&amp;')
+            .replace(/</g, '&lt;')
+            .replace(/>/g, '&gt;')
+            .replace(/"/g, '&quot;')
+            .replace(/'/g, '&#39;')
+            .slice(0, 300);
         const username = socket.id.substring(0, 6);
         
         // Save message to history (async, don't block broadcast)
diff --git a/src/network/sessionManager.js b/src/network/sessionManager.js
index 8600c27..fbecd0d 100644
--- a/src/network/sessionManager.js
+++ b/src/network/sessionManager.js
@@ -180,34 +180,56 @@ class SessionManager {
             creditsToAdd = parseInt(match[1], 10) || 10;
           }
 
-          // Add credits to user
-          const updateResult = await this.db.query(`
-            UPDATE users
-            SET credits = credits + $1,
-                total_credits_purchased = COALESCE(total_credits_purchased, 0) + $1
-            WHERE id = $2
-            RETURNING credits
-          `, [creditsToAdd, userId]);
+          // CRITICAL: Use transaction with row lock to prevent double-credit race condition
+          // This ensures only one instance can process a payment at a time
+          const recovered = await this.db.withTransaction(async (client) => {
+            // Lock the payment row and re-check if it's still unprocessed
+            const lockResult = await client.query(`
+              SELECT id, credits_purchased
+              FROM payments
+              WHERE id = $1
+              FOR UPDATE
+            `, [payment.id]);
 
-          const newBalance = updateResult.rows[0]?.credits ?? 0;
+            // If already processed (by another instance), skip
+            if (!lockResult.rows[0] || (lockResult.rows[0].credits_purchased && lockResult.rows[0].credits_purchased > 0)) {
+              return null; // Already processed
+            }
 
-          // Mark payment as processed
-          await this.db.query(`
-            UPDATE payments
-            SET credits_purchased = $1
-            WHERE id = $2
-          `, [creditsToAdd, payment.id]);
+            // Add credits to user
+            const updateResult = await client.query(`
+              UPDATE users
+              SET credits = credits + $1,
+                  total_credits_purchased = COALESCE(total_credits_purchased, 0) + $1
+              WHERE id = $2
+              RETURNING credits
+            `, [creditsToAdd, userId]);
 
-          // Record credit transaction
-          await this.db.query(`
-            INSERT INTO credit_transactions (user_id, amount, reason, balance_after, transaction_type)
-            VALUES ($1, $2, 'package_purchase_recovered', $3, 'purchase')
-          `, [userId, creditsToAdd, newBalance]);
+            const newBalance = updateResult.rows[0]?.credits ?? 0;
 
-          result.creditsRecovered += creditsToAdd;
-          result.paymentsProcessed++;
+            // Mark payment as processed (atomically with credit add)
+            await client.query(`
+              UPDATE payments
+              SET credits_purchased = $1
+              WHERE id = $2
+            `, [creditsToAdd, payment.id]);
 
-          console.log(`💰 [PaymentRecovery] Recovered ${creditsToAdd} credits for user ${userId} from payment ${payment.id}`);
+            // Record credit transaction
+            await client.query(`
+              INSERT INTO credit_transactions (user_id, amount, reason, balance_after, transaction_type)
+              VALUES ($1, $2, 'package_purchase_recovered', $3, 'purchase')
+            `, [userId, creditsToAdd, newBalance]);
+
+            return { creditsToAdd, newBalance };
+          });
+
+          if (recovered) {
+            result.creditsRecovered += recovered.creditsToAdd;
+            result.paymentsProcessed++;
+            console.log(`💰 [PaymentRecovery] Recovered ${recovered.creditsToAdd} credits for user ${userId} from payment ${payment.id}`);
+          } else {
+            console.log(`ℹ️ [PaymentRecovery] Payment ${payment.id} already processed by another instance`);
+          }
         } catch (paymentError) {
           console.error(`[PaymentRecovery] Failed to process payment ${payment.id}:`, paymentError.message);
         }
diff --git a/src/payments/payoutRetryService.js b/src/payments/payoutRetryService.js
new file mode 100644
index 0000000..70b27c2
--- /dev/null
+++ b/src/payments/payoutRetryService.js
@@ -0,0 +1,232 @@
+/**
+ * PayoutRetryService - Handles retrying failed payouts
+ *
+ * Processes payouts that have status 'pending' (stuck) or 'failed' (retryable)
+ * with retry_count below the maximum threshold.
+ */
+
+const { AppError } = require('../utils/errors');
+
+class PayoutRetryService {
+    constructor({ db, walletService, debugManager, maxRetries = 3, retryIntervalMs = 300000 }) {
+        this.db = db;
+        this.walletService = walletService;
+        this.debugManager = debugManager;
+        this.maxRetries = maxRetries;
+        this.retryIntervalMs = retryIntervalMs; // Default: 5 minutes
+        this.isProcessing = false;
+        this.retryTimer = null;
+    }
+
+    /**
+     * Start the retry service
+     */
+    start() {
+        if (this.retryTimer) {
+            console.log('⚠️ Payout retry service already running');
+            return;
+        }
+
+        console.log(`🔄 Starting payout retry service (interval: ${this.retryIntervalMs / 1000}s, max retries: ${this.maxRetries})`);
+
+        // Run immediately on start
+        this.processRetries();
+
+        // Then run on interval
+        this.retryTimer = setInterval(() => this.processRetries(), this.retryIntervalMs);
+    }
+
+    /**
+     * Stop the retry service
+     */
+    stop() {
+        if (this.retryTimer) {
+            clearInterval(this.retryTimer);
+            this.retryTimer = null;
+            console.log('🛑 Payout retry service stopped');
+        }
+    }
+
+    /**
+     * Process all retryable payouts
+     */
+    async processRetries() {
+        if (this.isProcessing) {
+            if (this.debugManager?.CONSOLE_LOGGING) {
+                console.log('⏳ Payout retry already in progress, skipping...');
+            }
+            return;
+        }
+
+        this.isProcessing = true;
+
+        try {
+            // Find payouts that need retry:
+            // 1. Status is 'pending' (stuck - RPC may have succeeded but DB update failed)
+            // 2. Status is 'failed' with retry_count < maxRetries
+            // Exclude very recent failures (wait at least 1 minute before retry)
+            const result = await this.db.query(`
+                SELECT p.*, g.payout_address as game_payout_address
+                FROM payouts p
+                LEFT JOIN games g ON p.game_id = g.id
+                WHERE (
+                    (p.status = 'pending' AND p.created_at < NOW() - INTERVAL '2 minutes')
+                    OR (p.status = 'failed' AND p.retry_count < $1 AND (p.last_retry_at IS NULL OR p.last_retry_at < NOW() - INTERVAL '1 minute'))
+                )
+                AND p.status != 'permanently_failed'
+                ORDER BY p.created_at ASC
+                LIMIT 10
+            `, [this.maxRetries]);
+
+            if (result.rows.length === 0) {
+                if (this.debugManager?.CONSOLE_LOGGING) {
+                    console.log('✅ No payouts to retry');
+                }
+                return;
+            }
+
+            console.log(`🔄 Processing ${result.rows.length} payout(s) for retry`);
+
+            for (const payout of result.rows) {
+                await this.retryPayout(payout);
+            }
+
+        } catch (error) {
+            console.error('❌ Error in payout retry process:', error.message);
+        } finally {
+            this.isProcessing = false;
+        }
+    }
+
+    /**
+     * Retry a single payout
+     */
+    async retryPayout(payout) {
+        const { id, user_id, game_id, payout_address, amount, multiplier, reason, retry_count, status } = payout;
+
+        console.log(`🔄 Retrying payout ${id} (attempt ${(retry_count || 0) + 1}/${this.maxRetries})`);
+
+        try {
+            // CRITICAL: If payout has a tx_hash, check blockchain BEFORE retrying
+            // This prevents double-spending if RPC succeeded but DB update failed
+            if (payout.tx_hash) {
+                try {
+                    const txStatus = await this.walletService.checkTransactionStatus(payout.tx_hash);
+                    if (txStatus.exists) {
+                        // Transaction is in blockchain/mempool - mark as completed, don't retry!
+                        await this.db.withTransaction(async (client) => {
+                            await client.query(`
+                                UPDATE payouts
+                                SET status = 'completed', processed_at = NOW()
+                                WHERE id = $1
+                            `, [id]);
+
+                            // Update user stats (may have been missed if original DB update failed)
+                            await client.query(`
+                                UPDATE users
+                                SET total_amount_won = COALESCE(total_amount_won, 0) + $1,
+                                    total_payouts_received = COALESCE(total_payouts_received, 0) + 1
+                                WHERE id = $2 AND NOT EXISTS (
+                                    SELECT 1 FROM payouts
+                                    WHERE id = $3 AND status = 'completed' AND processed_at IS NOT NULL
+                                )
+                            `, [amount, user_id, id]);
+                        });
+                        console.log(`✅ Payout ${id} already in blockchain (${txStatus.confirmations} confirmations), marked completed`);
+                        return;
+                    }
+                    // tx_hash exists in DB but NOT in blockchain - safe to retry
+                    console.log(`⚠️ Payout ${id} has tx_hash but not found in blockchain, will retry`);
+                } catch (checkError) {
+                    // If we can't check blockchain status, don't risk double-spend - mark for manual review
+                    console.error(`❌ Cannot verify tx_hash for payout ${id}, marking for manual review:`, checkError.message);
+                    await this.db.query(`
+                        UPDATE payouts
+                        SET status = 'needs_review',
+                            last_error = $1,
+                            last_retry_at = NOW()
+                        WHERE id = $2
+                    `, [`Cannot verify blockchain status: ${checkError.message}`, id]);
+                    return;
+                }
+            }
+
+            // Attempt the payout
+            const address = payout_address || payout.game_payout_address;
+            if (!address) {
+                throw new AppError(`No payout address found for payout ${id}`);
+            }
+
+            const payoutResult = await this.walletService.processPayout({
+                userId: user_id,
+                gameId: game_id,
+                address,
+                amount,
+                multiplier,
+                description: `Retry payout ${id} for game ${game_id}`
+            });
+
+            // IMMEDIATELY store tx_hash (same pattern as gameModeManager)
+            if (payoutResult.success && payoutResult.txHash) {
+                await this.db.query(`
+                    UPDATE payouts SET tx_hash = $1, fee = $2 WHERE id = $3
+                `, [payoutResult.txHash, payoutResult.fee, id]);
+            }
+
+            // Update payout record with success
+            await this.db.withTransaction(async (client) => {
+                await client.query(`
+                    UPDATE payouts
+                    SET status = 'completed',
+                        processed_at = NOW(),
+                        retry_count = COALESCE(retry_count, 0) + 1,
+                        last_retry_at = NOW()
+                    WHERE id = $1
+                `, [id]);
+
+                // Update user stats
+                await client.query(`
+                    UPDATE users
+                    SET total_amount_won = COALESCE(total_amount_won, 0) + $1,
+                        total_payouts_received = COALESCE(total_payouts_received, 0) + 1
+                    WHERE id = $2
+                `, [amount, user_id]);
+            });
+
+            console.log(`✅ Payout ${id} retry succeeded: ${payoutResult.txHash}`);
+
+        } catch (error) {
+            const newRetryCount = (retry_count || 0) + 1;
+            const newStatus = newRetryCount >= this.maxRetries ? 'permanently_failed' : 'failed';
+
+            await this.db.query(`
+                UPDATE payouts
+                SET status = $1,
+                    retry_count = $2,
+                    last_error = $3,
+                    last_retry_at = NOW()
+                WHERE id = $4
+            `, [newStatus, newRetryCount, error.message, id]);
+
+            if (newStatus === 'permanently_failed') {
+                console.error(`❌ Payout ${id} permanently failed after ${newRetryCount} attempts: ${error.message}`);
+            } else {
+                console.warn(`⚠️ Payout ${id} retry failed (attempt ${newRetryCount}/${this.maxRetries}): ${error.message}`);
+            }
+        }
+    }
+
+    /**
+     * Get retry service status
+     */
+    getStatus() {
+        return {
+            running: !!this.retryTimer,
+            isProcessing: this.isProcessing,
+            maxRetries: this.maxRetries,
+            retryIntervalMs: this.retryIntervalMs
+        };
+    }
+}
+
+module.exports = PayoutRetryService;
diff --git a/src/payments/walletRPCService.js b/src/payments/walletRPCService.js
index d9ed07e..b9862a3 100644
--- a/src/payments/walletRPCService.js
+++ b/src/payments/walletRPCService.js
@@ -318,6 +318,33 @@ class WalletRPCService {
         return truncated;
     }
 
+    /**
+     * Validate a payout address using wallet RPC
+     * @param {string} address - The address to validate
+     * @returns {Object} - { valid: boolean, integrated: boolean, subaddress: boolean }
+     */
+    async validateAddress(address) {
+        try {
+            if (!address || typeof address !== 'string') {
+                return { valid: false, error: 'Address is empty or not a string' };
+            }
+
+            const response = await this.rpcCall('validate_address', {
+                address: address.trim(),
+                any_net_type: false // Strict - must match wallet's network
+            });
+
+            return {
+                valid: response.result?.valid === true,
+                integrated: response.result?.integrated === true,
+                subaddress: response.result?.subaddress === true,
+                nettype: response.result?.nettype
+            };
+        } catch (error) {
+            return { valid: false, error: error.message };
+        }
+    }
+
     async processPayout({
         address,
         amount,
@@ -334,6 +361,14 @@ class WalletRPCService {
                 });
             }
 
+            // Validate address with wallet RPC before attempting transfer
+            const validation = await this.validateAddress(address);
+            if (!validation.valid) {
+                throw new AppError(`Invalid payout address: ${validation.error || 'validation failed'}`, {
+                    safeMessage: 'The payout address is invalid or not recognized by the wallet.'
+                });
+            }
+
             const normalizedAmount = this.normalizeAtomicAmount(amount);
 
             const transferParams = {
@@ -393,6 +428,47 @@ class WalletRPCService {
         }
     }
 
+    /**
+     * Check if a transaction exists in the blockchain or mempool
+     * Used by retry service to avoid double-spending
+     * @param {string} txHash - The transaction hash to check
+     * @returns {Object} - { exists: boolean, confirmed: boolean, in_mempool: boolean }
+     */
+    async checkTransactionStatus(txHash) {
+        try {
+            if (!txHash || typeof txHash !== 'string') {
+                return { exists: false, confirmed: false, in_mempool: false };
+            }
+
+            // Use get_transfer_by_txid to check if transaction exists
+            const response = await this.rpcCall('get_transfer_by_txid', {
+                txid: txHash,
+                account_index: this.accountIndex
+            });
+
+            if (response.result?.transfer) {
+                const transfer = response.result.transfer;
+                return {
+                    exists: true,
+                    confirmed: transfer.confirmations > 0,
+                    in_mempool: transfer.confirmations === 0,
+                    confirmations: transfer.confirmations || 0,
+                    amount: transfer.amount,
+                    fee: transfer.fee
+                };
+            }
+
+            return { exists: false, confirmed: false, in_mempool: false };
+        } catch (error) {
+            // If the RPC fails with "Transaction not found" style error, tx doesn't exist
+            if (error.message?.includes('not found') || error.details?.message?.includes('not found')) {
+                return { exists: false, confirmed: false, in_mempool: false };
+            }
+            // For other errors, we can't be sure, so throw
+            throw error;
+        }
+    }
+
     cleanupUserPayments(userId) {
         for (const [address, userInfo] of this.addressToUser.entries()) {
             if (userInfo.userId === userId || userInfo.socketId === userId) {