# Phase 1: Security + Testing

> Date: 2026-03-21
> Status: Complete

## Overview

This phase establishes the security foundation and testing framework for the ZCLAW architecture optimization project. It implements encrypted credential storage and enforces secure WebSocket connections.

## Changes

### Security Enhancements

#### 1. Encrypted localStorage Fallback (`secure-storage.ts`)

- **Issue**: Credentials were stored in plaintext in localStorage when OS keyring was unavailable
- **Solution**: Implemented AES-GCM encryption for localStorage fallback
- **Details**:
  - Added `crypto-utils.ts` with encryption/decryption functions
  - Uses PBKDF2 (100,000 iterations) for key derivation
  - Uses AES-GCM (256-bit) for encryption
  - Unique IV per encryption operation
  - Backward compatible with existing unencrypted data

#### 2. WSS Enforcement (`gateway-client.ts`)

- **Issue**: Non-localhost connections could use insecure `ws://` protocol
- **Solution**: Block non-localhost connections that don't use WSS
- **Details**:
  - Added `SecurityError` class for clear error handling
  - Added `validateWebSocketSecurity()` function
  - Throws error for `ws://` connections to non-localhost hosts
  - Allows `ws://` for localhost (development convenience)
  - Allows `wss://` for any host

### Testing Infrastructure

#### 1. Vitest Framework Setup

- Installed Vitest 2.1.8 with jsdom environment
- Added @testing-library/react for component testing
- Added @testing-library/jest-dom for DOM matchers
- Configured coverage thresholds (60% initial target)

#### 2. Test Files Created

| File | Tests | Coverage |
|------|-------|----------|
| `crypto-utils.test.ts` | 10 | arrayToBase64, base64ToArray, encrypt, decrypt, deriveKey, generateMasterKey |
| `secure-storage.test.ts` | 11 | Encryption fallback, backward compatibility, special characters |
| `gateway-security.test.ts` | 13 | isLocalhost, WSS enforcement, SecurityError |
| `chatStore.test.ts` | 39 | Messages, conversations, agents, streaming |

## Files Changed

### New Files

```
desktop/
├── src/lib/crypto-utils.ts          # AES-GCM encryption utilities
├── tests/lib/crypto-utils.test.ts   # Encryption tests
├── tests/lib/secure-storage.test.ts # Secure storage tests
├── tests/lib/gateway-security.test.ts # WSS security tests
├── tests/setup.ts                   # Vitest setup with mocks
└── vitest.config.ts                 # Vitest configuration
```

### Modified Files

```
desktop/
├── src/lib/secure-storage.ts        # Added encryption fallback
├── src/lib/gateway-client.ts        # Added WSS enforcement
└── package.json                     # Added test dependencies
```

## Migration Notes

- **Automatic Migration**: Existing unencrypted localStorage data will be automatically migrated on first read
- **No Manual Intervention**: The encryption/decryption is transparent to users
- **Key Generation**: A master key is automatically generated and stored in localStorage

## Breaking Changes

### WSS Required for Remote Connections

- `ws://` protocol is no longer allowed for non-localhost connections
- **Impact**: Users connecting to remote servers must use `wss://`
- **Migration**: Update gateway URLs to use `wss://` protocol

```javascript
// Before (now throws SecurityError)
const client = new GatewayClient('ws://example.com:4200/ws');

// After (required)
const client = new GatewayClient('wss://example.com:4200/ws');

// Localhost still works with ws://
const client = new GatewayClient('ws://localhost:4200/ws'); // OK
```

## Test Results

```
Test Files  4 passed (4)
Tests       73 passed (73)

New modules coverage:
- crypto-utils.ts:     100%
- secure-storage.ts:   95%+
- gateway-security:    100%
- chatStore.ts:        80%+
```

## Security Verification

- [x] localStorage credentials encrypted (AES-GCM)
- [x] Non-localhost connections require WSS
- [x] Encryption keys not exposed in logs
- [x] Backward compatible with unencrypted data
- [x] Unique IV per encryption operation

## Next Steps (Phase 2)

- Domain reorganization
- Migrate Chat Store to Valtio
- Migrate Hands Store + XState
- Enhance Intelligence caching
- Extract shared modules

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*Generated by Claude Code - Phase 1 Implementation*