Document the full escrow state machine (open → funded → settled/withdrawn) in `docs/escrow-lifecycle.md`

[mikewheeleer]

Description

InvoiceEscrow.status uses integer codes (0 open, 1 funded, 2 settled, 3 withdrawn) scattered across fund_impl, settle, and withdraw, but there is no single authoritative state diagram. Produce a complete state-transition table in docs/escrow-lifecycle.md covering every entrypoint, its allowed source states, target state, required authority, and legal-hold interaction.

Requirements and context

• Scoped to the LiquiFact escrow Soroban contract.
• Enumerate transitions: init→0, fund/fund_with_commitment 0→0/1, settle 1→2, withdraw 1→3, plus terminal-only sweep_terminal_dust.
• Note which transitions are blocked by DataKey::LegalHold and which require admin vs SME vs investor auth.
• Cross-link ADR-001 state model; include the FundingCloseSnapshot write trigger.
• Invariant: documentation must match the exact assert!(status == ...) guards in lib.rs.
• Must be accurate, reviewed, and aligned with code.

Suggested execution

• Fork the repo and create a branch:
  • git checkout -b docs/lifecycle-state-machine
• Implement changes:
  • escrow/src/lib.rs
  • Tests: escrow/src/tests/integration.rs
  • Docs: docs/escrow-lifecycle.md
  • Include rustdoc/NatSpec-style doc comments on public functions
  • Validate security assumptions (auth, overflow, storage TTL, double-spend)

Test and commit

• Run tests: cargo test
• Cover edge cases (zero amounts, overflow, unauthorized callers, double-spend, state-machine misuse)
• Include test output and security notes in the PR

Example commit message

docs(escrow): authoritative lifecycle state machine

Guidelines

• Minimum 95% test coverage on new/changed code
• Clear documentation
• Timeframe: 96 hours from assignment

[Oluwatomilola]

@Oluwatomilola has applied to work on this issue as part of the Stellar Wave Program's 5th wave.

I can fix this.

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[drips-wave]

Congratulations, @Oluwatomilola! 🎉 Your application was accepted by the repo's maintainers, and the issue is due on June 2, 2026.

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