> ## Documentation Index
> Fetch the complete documentation index at: https://docs.conduitpay.xyz/llms.txt
> Use this file to discover all available pages before exploring further.

# How It Works

> The full x402 payment flow from first request to on-chain settlement.

## The 5-step flow

<Steps>
  <Step title="Client hits your API">
    No payment header present. Your route returns `402 Payment Required` with a `Payment-Required` header containing amount, token, network, recipient, and facilitator URL.
  </Step>

  <Step title="Client pays on Arc">
    AI agents sign an EIP-3009 `transferWithAuthorization` and retry with a `Payment-Signature` header. Browsers are redirected to the Conduit pay page, connect MetaMask, and confirm.
  </Step>

  <Step title="withPayment() verifies">
    The middleware calls `POST /api/x402/verify`. Conduit checks the payload, timing, amount, recipient, nonce (replay protection), and balance.
  </Step>

  <Step title="Handler is called">
    Verification passed — your handler runs and the response is served immediately.
  </Step>

  <Step title="Conduit settles async">
    After serving the response, `withPayment()` calls `POST /api/x402/settle` in the background. Conduit executes the transfer on Arc.
  </Step>
</Steps>

## Replay protection

Every EIP-3009 authorization has a unique nonce. Before processing, Conduit calls `authorizationState(from, nonce)` on the USDC contract on Arc. If the nonce was already used, verification is rejected immediately. Replay attacks are impossible.

## Sequence

```
Client          Your API         Conduit /verify    Arc Network
  |--- GET ------->|                  |                  |
  |<-- 402 --------|                  |                  |
  |  [pays on Arc] |                  |                  |
  |--- GET + sig ->|--- verify(sig) ->|--- check nonce ->|
  |                |<-- isValid:true -|<-- nonce ok -----|
  |<-- 200 --------|--- settle(sig) ->|--- transfer ---->|
```