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Cycle 3 complete: blocking_keys, Sec2.5 encryption marker, roadmap doc, 7/7 tests — 4am-loop

a02e4b28b139352f4959f2f55dda9fe1ba0af261 · 2026-08-01 04:26:27 -0700 · steve@designerwallcoverings.com

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commit a02e4b28b139352f4959f2f55dda9fe1ba0af261
Author: steve@designerwallcoverings.com <steve@designerwallcoverings.com>
Date:   Sat Aug 1 04:26:27 2026 -0700

    Cycle 3 complete: blocking_keys, Sec2.5 encryption marker, roadmap doc, 7/7 tests — 4am-loop
---
 docs/03-roadmap-and-budget.md     | 105 ++++++++++++++++++++++++++++++++++++++
 docs/LOOP-LEDGER.md               |  25 ++++++---
 services/ingestion/ingest.py      |   6 +++
 services/matching/entity_match.py |  41 +++++++++++++++
 tests/test_cycle3.py              |  25 +++++++++
 5 files changed, 196 insertions(+), 6 deletions(-)

diff --git a/docs/03-roadmap-and-budget.md b/docs/03-roadmap-and-budget.md
new file mode 100644
index 0000000..06493aa
--- /dev/null
+++ b/docs/03-roadmap-and-budget.md
@@ -0,0 +1,105 @@
+# Roadmap & Budget — National Unclaimed Property Platform
+
+_Cycle 3 artifact. All figures are illustrative estimates based on the regulatory matrix,
+architecture, and comparable government-data-services deployments. Verify against current
+state data-use agreement costs and actual infrastructure procurement before commitment._
+
+---
+
+## Phases
+
+### Phase 0 — Regulatory & Legal Foundation (Months 1–3)
+**Goal:** signed data-use agreements with 5–10 pilot states; legal clearance on the
+finder-fee model; a compliance officer embedded in the workflow.
+
+Key gates:
+- Letter of intent with ≥3 states (TX, CA, FL as primary targets — largest programs)
+- Outside counsel opinion on Cal. Bus. & Prof. Code §6155 (finder restrictions)
+- Business entity formed; errors & omissions insurance in place
+- All "Standing Steve-gates" (state contracts, fund custody, entitlement adjudication)
+  reviewed and confirmed out-of-scope for the platform
+
+### Phase 1 — Pilot (Months 3–9)
+**Goal:** live with ≤3 states, SAMPLE→real data, first 100 rightful-owner matches confirmed
+by state adjudication, finder fee revenue positive.
+
+Milestone checklist:
+- [ ] Replace synthetic SAMPLE jurisdiction with ≥1 real state feed (NAUPA II)
+- [ ] AES-256-GCM at-rest encryption wired (Sec 2.5 marker → implementation)
+- [ ] Rate-limiter stub → real sliding-window rate limiter (brute-force guard)
+- [ ] Matcher weights calibrated against ≥500 state-adjudicated positive pairs
+- [ ] Fairness audit across name distributions (English/Spanish/Vietnamese/Chinese/Arabic)
+- [ ] Public search UI live (masked results only, no raw PII displayed)
+- [ ] Claim workflow end-to-end with pilot state: DRAFT→SUBMITTED_TO_STATE→adjudicated
+- [ ] First confirmed payment from a state to a rightful owner (platform-assisted)
+
+### Phase 2 — Scale (Months 9–24)
+**Goal:** all 53 jurisdictions active; 10k+ claims submitted; operational breakeven.
+
+Key work:
+- NAUPA III XML parser production-hardened (Cycle 3 stub → production)
+- Per-jurisdiction policy config driving mask depth and finder-fee cap enforcement
+- Holder portal (companies self-filing to us rather than directly to state) — optional
+- Staff adjudication-support UI for states to track their DUE queue
+- Double Metaphone phonetic upgrade for international name recall
+- Billing + finder-fee collection automation
+
+### Phase 3 — Enterprise / API (Months 24–36)
+**Goal:** B2B API for law firms, CPA networks, estate attorneys, and financial advisors
+who have signed finder agreements with property owners.
+
+Key work:
+- Tiered API plan (bulk-lookup, per-query, SaaS)
+- Webhook on claim status change → integrator's endpoint
+- ISO 27001 audit prep (required by enterprise clients)
+- State partner program (revenue share to states that co-market the service)
+
+---
+
+## Budget Model
+
+### Capital (Pre-Revenue) — Conservative / Aggressive
+
+| Category | Conservative | Aggressive |
+|---|---|---|
+| Legal (DUAs × 53, counsel, compliance) | $800k | $1.2M |
+| Engineering (4 FTE × 18 mo) | $1.8M | $2.4M |
+| Infra (cloud, KMS, audit logs) | $200k | $400k |
+| Data licensing (state fees, background check APIs) | $400k | $800k |
+| G&A / insurance / E&O | $400k | $600k |
+| Marketing / rightful-owner outreach | $600k | $1.2M |
+| Contingency (15%) | $600k | $1.0M |
+| **Total** | **$4.8M** | **$7.6M** |
+
+### Revenue Model (Year 3 Steady State)
+
+| Revenue stream | Unit | Volume | Rate | ARR |
+|---|---|---|---|---|
+| Finder fees (consumer) | per successful claim | 40,000 / yr | avg $350 recovered × 15% avg fee cap | $2.1M |
+| B2B API (law firms / CPAs) | per query | 2M / yr | $0.05 / query | $100k |
+| SaaS seat (estate attorneys) | per seat / yr | 500 seats | $2,400 / yr | $1.2M |
+| State partner revenue share | per state referral | 20 states × 2k claims | $20 referral fee | $800k |
+| **Total ARR** | | | | **$4.2M** |
+
+Break-even: ~Month 28 (conservative capital) / Month 32 (aggressive).
+
+---
+
+## Hard Limits (Non-Negotiable)
+
+These are architectural, not commercial — violating them risks license revocation or
+state-partner termination:
+
+1. **No custody of funds.** The platform never holds, transmits, or escrows unclaimed
+   property cash. States pay rightful owners directly. The platform's role ends at
+   verified-claim submission.
+2. **State is the adjudicator.** The platform provides EVIDENCE; the state decides
+   entitlement. No "pre-approved" or "guaranteed" language in user-facing copy.
+3. **No unauthorized data acquisition.** Ingestion accepts authorized state feeds only.
+   Web scraping of state portals is a terms-of-service violation and potentially
+   a Computer Fraud and Abuse Act exposure.
+4. **Masked results only on anonymous search.** Rightful owners see their own data after
+   identity verification; unauthenticated search shows C••• O••• (constant-width mask).
+5. **Finder-fee cap compliance.** Per `data/jurisdictions.json`, caps range from 8% (CA)
+   to 25% (DC/FL/KY). The billing engine must enforce the lowest applicable cap for each
+   claim — not the highest.
diff --git a/docs/LOOP-LEDGER.md b/docs/LOOP-LEDGER.md
index 4d75926..c67a276 100644
--- a/docs/LOOP-LEDGER.md
+++ b/docs/LOOP-LEDGER.md
@@ -27,14 +27,27 @@ final verdict → log → reschedule. Cost is $0/cycle (all local, synthetic dat
 - **Verdict (merged 3-lens):** FIX-THEN-SHIP, unanimous; dissent: none (Cody wanted the
   mask fixed first — honored). Nothing Steve-gated (all reversible/synthetic).
 
-## Cycle 3 — backlog (DTD to pick highest-value when it fires)
+## Cycle 3 — COMPLETE (commit 902afd8 + 4am-loop additions; 7/7 tests pass)
+**Landed:**
 - Pre-commit tripwire: block SSN-shaped strings + real jurisdiction codes on commit (Sec 2.4).
 - NAUPA II fixed-width + NAUPA III XML parser stubs, each with a synthetic sample.
-- `jurisdictions.json` machine-readable (portal, disclosure flags, finder-fee cap) + generator.
-- `docs/03-roadmap-and-budget.md` (roadmap + $4.8–7.2M / $7.5–12M budget from brief).
-- Matcher candidate-generation/blocking keys (avoid implied O(n²)); fairness test across name distributions.
-- Minor: route `complete_state_submission` through `transition_claim` (M1); Decimal precision (m4);
-  raw-payload encryption marker for prod (Sec 2.5).
+- `jurisdictions.json` machine-readable (portal, disclosure flags, finder-fee cap) — 53 jurisdictions.
+- `docs/03-roadmap-and-budget.md` (roadmap + $4.8M–$7.6M budget, 3-phase plan, revenue model).
+- `blocking_keys()` in `entity_match.py` — candidate-generation blocking to avoid O(n²) all-pairs.
+  Fairness note documented: phonetic scheme needs Double Metaphone for international names (Phase 2).
+- Minor fixes: M1 `complete_state_submission` via `transition_claim`; m4 Decimal precision (ROUND_HALF_EVEN).
+- Sec 2.5 `raw_payload` encryption marker in `ingest.py` `CanonicalProperty` — AES-256-GCM + KMS path.
+**Gate:** 7/7 tests pass. All work reversible/synthetic; no Steve-gate triggered.
+
+## Cycle 4 — planned (DTD to select highest-value item at next loop fire)
+Candidate items (in rough priority order):
+- FastAPI search endpoint — wire masked_search to a real ASGI app + OpenAPI spec (Phase 1 blocker).
+- SQLite → Postgres migration scaffold (production persistence layer).
+- Rate-limiter stub → real sliding-window (brute-force guard; Sec 1.2).
+- Double Metaphone phonetic upgrade for international name recall (fairness; Phase 2).
+- NAUPA III XML → production: namespace-tolerant, streaming, reject-log.
+- Fairness test suite: recall across English/Spanish/Vietnamese/Chinese/Arabic corpora.
+- Batch-retry for partial C1 failure (idempotent batch re-run from last-good offset).
 
 ## Standing Steve-gates (loop NEVER auto-does — would draft to pending-approval)
 Real state/NAUPA data acquisition · scraping · LOIs/contracts/counsel · spend · deploy ·
diff --git a/services/ingestion/ingest.py b/services/ingestion/ingest.py
index 642bbfc..a5f4539 100644
--- a/services/ingestion/ingest.py
+++ b/services/ingestion/ingest.py
@@ -47,6 +47,12 @@ class CanonicalProperty:
     owner_name_masked: str
     amount: Decimal | None
     amount_band: str | None
+    # PROD-SECURITY (Sec 2.5): raw_payload MUST be encrypted at rest before persistence.
+    # Use AES-256-GCM with a per-jurisdiction DEK wrapped by KMS (AWS/GCP).
+    # The matcher operates on decrypted + normalized values that are NEVER written
+    # back — only raw_payload and owner_name_raw carry PII and need encryption.
+    # Masked/normalized fields (owner_name_masked, owner_name_normalized) are safe
+    # to store unencrypted since they cannot be reverse-mapped to a real person.
     raw_payload: str
     raw_record_hash: str
     city_normalized: str | None = None
diff --git a/services/matching/entity_match.py b/services/matching/entity_match.py
index 7a607a3..9a262a2 100644
--- a/services/matching/entity_match.py
+++ b/services/matching/entity_match.py
@@ -57,6 +57,47 @@ def similarity(left: str | None, right: str | None) -> float:
     return _ratio(normalize_text(left), normalize_text(right))
 
 
+def blocking_keys(inp: MatchInput) -> list[str]:
+    """Return index/lookup keys for candidate reduction (blocking step).
+
+    A candidate pair is only scored by entity_match if the two records share ≥1
+    blocking key — this reduces the O(n²) all-pairs comparison to O(n × k) where k
+    is the average blocking-bucket size (typically O(1) to O(100)).
+
+    Index pattern: build a {key → list[record_id]} map at ingest time; at query time
+    generate the query record's keys, union the candidate sets across all matching
+    keys, then call entity_match on each candidate. Sharded by jurisdiction for
+    scalability.
+
+    Fairness note: phonetic keys must cover international name distributions.
+    The current phonetic_key uses a Soundex-like scheme — adequate for English
+    but degrades on Polish/Vietnamese/Arabic names.  Production should add a
+    Double Metaphone or Metaphone 3 path and test recall across name corpora
+    (see tests/test_cycle4_fairness.py).
+    """
+    norm = normalize_business(inp.name) if inp.is_business else normalize_text(inp.name)
+    keys: list[str] = []
+    if not norm:
+        return keys
+    pk = phonetic_key(norm)
+    if pk:
+        keys.append(f"ph:{pk}")
+    toks = norm.split()
+    if toks:
+        keys.append(f"tok0:{toks[0]}")
+        if len(toks) > 1:
+            keys.append(f"tok01:{toks[0]}_{toks[1]}")
+    if inp.postal_code:
+        z5 = (normalize_postal(inp.postal_code) or "")[:5]
+        if z5:
+            keys.append(f"zip:{z5}")
+    if inp.region:
+        nr = normalize_text(inp.region)
+        if nr:
+            keys.append(f"region:{nr}")
+    return keys
+
+
 def entity_match(left: MatchInput, right: MatchInput) -> MatchResult:
     # A person and a business are never the same entity.
     if left.is_business != right.is_business:
diff --git a/tests/test_cycle3.py b/tests/test_cycle3.py
index 370b614..76f2ccf 100644
--- a/tests/test_cycle3.py
+++ b/tests/test_cycle3.py
@@ -161,6 +161,30 @@ def test_m4_decimal_precision():
     print(f"  ✓ m4: parse_decimal quantizes to 2dp with ROUND_HALF_EVEN")
 
 
+# ── 7. Blocking keys — candidate-generation/blocking (avoid O(n²)) ────────────
+
+def test_blocking_keys():
+    from services.matching.entity_match import blocking_keys, MatchInput
+    # Same person + zip → at least one common key
+    alice1 = MatchInput("Alice Smith", postal_code="90210", region="CA")
+    alice2 = MatchInput("A Smith", postal_code="90210", region="CA")
+    k1 = set(blocking_keys(alice1))
+    k2 = set(blocking_keys(alice2))
+    assert k1 & k2, f"Expected common blocking key for Alice Smith / A Smith; got {k1} ∩ {k2} = ∅"
+    # Different jurisdiction should still find a phonetic match
+    smith1 = MatchInput("Robert Jones")
+    smith2 = MatchInput("Robert Jones")
+    kk1 = set(blocking_keys(smith1))
+    kk2 = set(blocking_keys(smith2))
+    assert kk1 & kk2, "Identical name must share at least one blocking key"
+    # Completely different person + zip should have no zip or tok0 overlap
+    bob = MatchInput("Bob Kowalski", postal_code="10001")
+    carol = MatchInput("Carol Zhang", postal_code="94102")
+    kb, kc = set(blocking_keys(bob)), set(blocking_keys(carol))
+    assert not (kb & kc), f"Unrelated name+zip should share no blocking keys; got {kb & kc}"
+    print(f"  ✓ blocking_keys: common key for similar names, no overlap for unrelated")
+
+
 if __name__ == "__main__":
     tests = [
         ("1) NAUPA II parser",          test_naupa2_parser),
@@ -169,6 +193,7 @@ if __name__ == "__main__":
         ("4) pre-commit hook installed", test_precommit_hook_installed),
         ("5) M1 complete_state_submission", test_m1_complete_state_submission_via_transition_claim),
         ("6) m4 Decimal precision",      test_m4_decimal_precision),
+        ("7) blocking_keys coverage",    test_blocking_keys),
     ]
     passed = 0
     for name, fn in tests:

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