# Refund Flow — verify_deposit after refund fails

User deposits BTC, requests and executes refund. Later, Relayer tries
to call `verify_deposit` for the same UTXO — it fails because the UTXO
was already spent on Bitcoin by the refund transaction.

## File References

| # | Method | File |
|---|--------|------|
| 1 | `get_user_deposit_address` | `contracts/satoshi-bridge/src/api/bridge.rs:406` |
| 2 | `request_refund` | `contracts/satoshi-bridge/src/api/bridge.rs:426` |
| 3 | `verify_transaction_inclusion` | `contracts/satoshi-bridge/src/btc_light_client/mod.rs:113` |
| 4 | `request_refund_callback` | `contracts/satoshi-bridge/src/refund.rs:170` |
| 5 | `execute_refund` | `contracts/satoshi-bridge/src/api/bridge.rs:454` |
| 6 | `sign_btc_transaction` | `contracts/satoshi-bridge/src/api/chain_signatures.rs:21` |
| 7 | `sign` (MPC) | `contracts/satoshi-bridge/src/chain_signature.rs:57` |
| 8 | `sign_btc_transaction_callback` | `contracts/satoshi-bridge/src/chain_signature.rs:135` |
| 9 | `verify_deposit` | `contracts/satoshi-bridge/src/api/bridge.rs:22` |

## Sequence Diagram

```mermaid
%%{init: {'theme': 'base', 'themeVariables': {'actorTextColor': '#000000', 'actorLineColor': '#333333', 'signalColor': '#333333', 'signalTextColor': '#000000', 'noteBkgColor': '#fff9c4', 'noteTextColor': '#000000', 'messageFontSize': '14px'}}}%%
sequenceDiagram
    autonumber

    box rgb(224, 224, 224) Off-chain
        participant U as User
    end

    box rgb(255, 224, 178) Bitcoin
        participant BTC as Bitcoin Network
    end

    box rgb(224, 224, 224) Off-chain
        participant R as Relayer
    end

    box rgb(187, 222, 251) NEAR Protocol
        participant B as btc_connector<br/>(satoshi-bridge)
        participant LC as BTC Light Client
        participant MPC as Chain Signatures<br/>(MPC)
    end

    U->>B: get_user_deposit_address(DepositMsg {<br/>recipient_id, refund_address: "bc1q..."})<br/>📄 api/bridge.rs:406
    B-->>U: BTC deposit address

    U->>BTC: Send BTC to deposit address
    Note over BTC: Transaction confirmed

    U->>B: request_refund(deposit_msg, tx_proof)<br/>📄 api/bridge.rs:426

    B->>LC: verify_transaction_inclusion(tx_id, merkle_proof)<br/>📄 btc_light_client/mod.rs:113
    LC-->>B: valid

    Note over B: request_refund_callback<br/>📄 refund.rs:170
    B->>B: Save RefundRequest

    Note over B: Timelock passes

    U->>B: execute_refund(utxo_storage_key)<br/>📄 api/bridge.rs:454

    rect rgb(255, 200, 200)
        Note over R,B: verify_deposit blocked after execute_refund
        R->>B: verify_deposit(deposit_msg, tx_proof)<br/>📄 api/bridge.rs:22
        B->>LC: verify_transaction_inclusion(tx_id, merkle_proof)
        LC-->>B: valid
        Note over B: PANIC: "Already deposit utxo"
    end

    U->>B: sign_btc_transaction(sign_index)<br/>📄 api/chain_signatures.rs:21

    B->>MPC: sign(payload, path, key_version)<br/>📄 chain_signature.rs:57
    MPC-->>B: signature

    Note over B: sign_btc_transaction_callback<br/>📄 chain_signature.rs:135

    U->>BTC: Broadcast refund transaction
    BTC-->>U: BTC returned to refund_address

    rect rgb(255, 200, 200)
        Note over R,B: verify_deposit still blocked after broadcast
        R->>B: verify_deposit(deposit_msg, tx_proof)<br/>📄 api/bridge.rs:22
        B->>LC: verify_transaction_inclusion(tx_id, merkle_proof)
        LC-->>B: valid
        Note over B: PANIC: "Already deposit utxo"
    end

    R->>B: verify_refund_finalize(tx_id, tx_proof)<br/>📄 api/bridge.rs

    B->>LC: verify_transaction_inclusion(tx_id, merkle_proof)<br/>📄 btc_light_client/mod.rs:113
    LC-->>B: valid

    Note over B: verify_refund_finalize_callback<br/>📄 refund.rs
    B->>B: Remove BTCPendingInfo

    rect rgb(255, 200, 200)
        Note over R,B: verify_deposit still blocked after verify_refund_finalize
        R->>B: verify_deposit(deposit_msg, tx_proof)<br/>📄 api/bridge.rs:22
        B->>LC: verify_transaction_inclusion(tx_id, merkle_proof)
        LC-->>B: valid
        Note over B: PANIC: "Already deposit utxo"
    end
```