PACT — PayPal Conditional Settlement Console

"PayPal can hold money. It cannot tell if the work is real." PACT pairs PayPal AUTHORIZE holds with a split-brain AI witness to verify deliverables before settlement release. Fail closed.

Comment

💡 Inspiration

Online contracting faces an intractable trust problem:

  • Pre-paying forces buyers to trust unknown workers or autonomous AI agents before seeing real work.
  • Post-paying forces workers to build on credit, hoping the buyer doesn't disappear.
  • Traditional Escrow requires a licensed third-party custodian that holds your money, takes a heavy commission, and adds regulatory drag.

PayPal already provides an underutilized, non-custodial authorization primitive: intent: AUTHORIZE. The buyer authorizes funds directly in PayPal, locking money in their own account without giving custody to any middleman.

However, PayPal alone cannot inspect an API endpoint, verify a mobile screenshot, run a test suite, or validate delivered code. We built PACT to provide an objective, split-brain AI witness layer that verifies deliverables before releasing settlement.

"PayPal can hold money. It cannot tell if the work is real."

⚙️ What It Does

PACT is a high-density conditional settlement console designed for autonomous agent contracts and human freelancers:

  1. Natural Language Contract Synthesis: The buyer describes the work (or clicks a preset like Waitlist Page, Auth Microservice, or Database Migration). PACT tokenizes the brief and synthesizes a formal Pact 1.0 JSON specification with weighted criteria (C1–C4), release threshold (min score 80), revision budget, and deadline.
  2. Non-Custodial PayPal Hold: The buyer authorizes the payment through PayPal Checkout using intent: AUTHORIZE. The authorization ID is saved with status HELD. PACT never takes custody of funds.
  3. Split-Brain Witness Verification: The worker submits deliverables (live URLs, desktop screenshots, mobile viewports). An isolated AI witness scores the evidence against the published criteria.
    • Critical Security Invariant: The witness verifier has zero PayPal API keys and zero capture or void privileges.
  4. Fail-Closed Policy Engine:
    • If criteria fail (e.g. Score 70/100 FAIL due to missing mobile artifact): Funds remain strictly HELD in PayPal. Revisions are permitted. The verifier cannot void or seize funds.
    • If criteria pass (e.g. Score 94/100 PASS): The policy engine unlocks the settlement pathway, triggering PayPal's POST /v2/payments/authorizations/{id}/capture.
  5. Cryptographic Attestation Receipt: Generates an immutable SHA-256 certificate receipt proving non-custodial settlement, verified score, and PayPal capture ID.

🛠️ How We Built It

  • Frontend & Workstation Shell: Built with Next.js 16 (App Router), TypeScript, and Tailwind CSS, implementing the Void Ledger design system (Braun × Bloomberg Terminal × Teenage Engineering). Framer Motion spring physics drive full-viewport non-overlapping rails (228px ↔ 64px sidebar, 300px ↔ 36px telemetry).
  • Backend & Database: Next.js Route Handlers powered by native Node.js node:sqlite (DatabaseSync with zero native C++ compilation dependencies) storing contracts, PayPal object states, deliverables, verdicts, and receipts in ./data/pact.db.
  • PayPal Integration: Full REST API v2 integration:
    • POST /v2/checkout/orders with intent: AUTHORIZE
    • POST /v2/checkout/orders/{id}/authorize
    • POST /v2/payments/authorizations/{id}/capture
    • POST /v1/notifications/verify-webhook-signature (validating transmission ID, timestamp, CRC32, and cert URL).
  • Witness Isolation Sandbox: The verifier runs in an isolated module (lib/verifier) with strictly capped tools (5-second timeout, 100 KB payload ceiling) and zero imports or knowledge of PayPal credentials.

🧗 Challenges We Ran Into

  • Split-Brain Key Isolation: Ensuring the evaluator could never be manipulated via prompt injection or deliverable payloads into triggering an unauthorized capture. We enforced this at the architectural layer: the verifier module possesses zero PayPal tokens or tools.
  • Fail-Closed State Machine: Handling non-ideal paths where deliverables fail without accidentally locking the user out or triggering illegal state transitions. Funds must safely remain HELD until explicit policy conditions are satisfied.
  • Full Viewport Engineering: Building responsive, non-overlapping Framer Motion spring rails so judges have a 100vh full-viewport Bloomberg-style experience without modal popups or broken scrollbars.

🏆 Accomplishments We're Proud Of

  • Genuine PayPal REST Movement: Real sandbox checkout where buyers log into PayPal Sandbox and authorize funds without middleman custody.
  • Working Fail-Closed Demonstration: Scripted walkthrough showing the exact contrast between fixtures/bad.html (70 FAIL → funds stay safely HELD) and fixtures/good.html (94 PASS → settlement released).
  • Void Ledger Aesthetic: A distinct, high-density, distraction-free aesthetic with micro-metrics, interactive criteria weight meters, and zero AI-template fluff.

📚 What We Learned

  • PayPal's two-step AUTHORIZE → CAPTURE lifecycle is the ideal primitive for AI agent economies because it avoids custody and money transmission licenses while offering complete payment security.
  • Decoupling proof evaluation (the witness) from money movement (the policy engine) is essential for AI safety in financial transactions.

🔮 What's Next for PACT

  • Automated GitHub Actions and Webhook integrations so continuous integration test runs directly feed proof into the witness verifier.
  • Multi-party arbitration thresholds where multiple consensus verifier agents score complex deliverables.

Built With

Share this project:

Updates

Submission history