fix(card): revert to collateral-first spend routing (incident: smart-first reverts on-chain)

[jjramirezn]

🚨 Incident mitigation — reverts #2230

Symptom (prod): card users whose funds live in collateral get Paymaster error … UserOperation reverted during simulation … ERC20: transfer amount exceeds balance when trying to pay — the payment hard-fails.

Cause: #2230 reordered computeSpendStrategy to smart-first. But card funds are swept smart→collateral to back the card, so the smart account is normally ~empty. The FE's smartBalance (useBalance, 30s-cached / read before a sweep) can be >= amount while the on-chain smart account is empty → smart-only is chosen → the kernel USDC transfer reverts at the paymaster. The old collateral-first ordering never trusted the smart balance for these users, so it was safe.

This PR: restores collateral-first ordering + its test, and leaves a NOTE in the code documenting why smart-first was reverted.

Trade-off

• Restores the pre-fix(card): prioritize smart-account balance over Rain collateral for spends #2230 behavior → reopens the original Rain withdrawal-signature cooldown on rapid back-to-back payments when the user does hold smart-account USDC (kkonrad's report). That's a tolerable annoyance vs. broken payments.
• The correct smart-first redo (follow-up) needs: a live/uncached smart-balance read at routing time AND a fallback to collateral when the smart-only path can't be funded (catch the revert / pre-simulate). Not safe to land without that.

QA

• npx jest src/hooks/wallet — strategy returns collateral-only when collateral covers (single recipient), smart-only only when collateral path ineligible and smart covers, mixed for shortfall.
• Sandbox: collateral-funded card user (smart ~0) makes a payment → routes collateral-only, no paymaster revert.

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Project	Deployment	Actions	Updated (UTC)
peanut-wallet	Ready	Preview, Comment	Jun 16, 2026 5:17pm

[coderabbitai]

No actionable comments were generated in the recent review. 🎉

ℹ️ Recent review info

⚙️ Run configuration

Configuration used: Organization UI

Review profile: CHILL

Plan: Pro

Run ID: 0e2005d4-a0e8-4bf7-9f7d-3045fc92353f

📥 Commits

Reviewing files that changed from the base of the PR and between 9f371b3 and b8cd018.

📒 Files selected for processing (2)

• src/hooks/wallet/__tests__/useSpendBundle.test.ts
• src/hooks/wallet/useSpendBundle.ts

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Walkthrough

computeSpendStrategy in useSpendBundle.ts now checks collateral-only before smart-only: when collateralOnlyAllowed is true and Rain can fully cover the amount, it returns collateral-only; otherwise it falls back to smart-only. The test for the overlapping-coverage case is updated to expect collateral-only.

Changes

computeSpendStrategy Collateral-First Routing

Layer / File(s)	Summary
Routing priority swap and test update src/hooks/wallet/useSpendBundle.ts, src/hooks/wallet/__tests__/useSpendBundle.test.ts	computeSpendStrategy now returns collateral-only before smart-only when collateralOnlyAllowed is true and Rain can cover the full amount; the inline comment is updated to note the revert of the prior smart-first order, and the test case is updated to expect collateral-only in the overlapping-coverage scenario.

Estimated code review effort

🎯 2 (Simple) | ⏱️ ~5 minutes

Possibly related PRs

• peanutprotocol/peanut-ui#2230: Directly modifies the same computeSpendStrategy routing priority and useSpendBundle.test.ts expectations, with the opposite smart-first ordering that this PR reverts.

🚥 Pre-merge checks | ✅ 5

✅ Passed checks (5 passed)

Check name	Status	Explanation
Title check	✅ Passed	The title clearly and concisely describes the main change: reverting to collateral-first spend routing and references the incident it fixes (#2230 smart-first revert causing on-chain failures).
Description check	✅ Passed	The description is well-detailed and directly related to the changeset, explaining the incident symptom, root cause (smart-first causing paymaster reverts), the fix (collateral-first restoration), trade-offs, and QA verification.
Docstring Coverage	✅ Passed	No functions found in the changed files to evaluate docstring coverage. Skipping docstring coverage check.
Linked Issues check	✅ Passed	Check skipped because no linked issues were found for this pull request.
Out of Scope Changes check	✅ Passed	Check skipped because no linked issues were found for this pull request.

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✨ Finishing Touches

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[github-actions]

Code-analysis diff

Painscore total: 5786.03 → 5786.17 (+0.14)
Findings: 0 net (+9 new, -9 resolved)

🆕 New findings (9)

• medium high-mdd — src/hooks/wallet/useSpendBundle.ts:141 — useSpendBundle: MDD 68.0 (uses across many lines from declarations)
• medium high-mdd — src/hooks/wallet/useSpendBundle.ts:155 — : MDD 60.5 (uses across many lines from declarations)
• medium structural-dup — src/hooks/wallet/useSignSpendBundle.ts:271 — 22 duplicate lines / 98 tokens with src/hooks/wallet/useSpendBundle.ts:334
• medium structural-dup — src/hooks/wallet/useSpendBundle.ts:216 — 22 duplicate lines / 116 tokens with src/hooks/wallet/useSpendBundle.ts:300
• medium structural-dup — src/hooks/wallet/useSignSpendBundle.ts:197 — 20 duplicate lines / 98 tokens with src/hooks/wallet/useSpendBundle.ts:220
• low high-dlt — src/hooks/wallet/useSpendBundle.ts:141 — useSpendBundle: DLT 26 (calls 26 distinct functions — high context load)
• low high-dlt — src/hooks/wallet/useSpendBundle.ts:155 — : DLT 19 (calls 19 distinct functions — high context load)
• low structural-dup — src/hooks/wallet/useSignSpendBundle.ts:241 — 12 duplicate lines / 50 tokens with src/hooks/wallet/useSpendBundle.ts:289
• low missing-return-type — src/hooks/wallet/useSpendBundle.ts:141 — useSpendBundle: exported fn missing return type annotation

✅ Resolved (9)

• src/hooks/wallet/useSpendBundle.ts:138 — useSpendBundle: MDD 68.0 (uses across many lines from declarations)
• src/hooks/wallet/useSpendBundle.ts:152 — : MDD 60.5 (uses across many lines from declarations)
• src/hooks/wallet/useSignSpendBundle.ts:271 — 22 duplicate lines / 98 tokens with src/hooks/wallet/useSpendBundle.ts:331
• src/hooks/wallet/useSpendBundle.ts:213 — 22 duplicate lines / 116 tokens with src/hooks/wallet/useSpendBundle.ts:297
• src/hooks/wallet/useSignSpendBundle.ts:197 — 20 duplicate lines / 98 tokens with src/hooks/wallet/useSpendBundle.ts:217
• src/hooks/wallet/useSpendBundle.ts:138 — useSpendBundle: DLT 26 (calls 26 distinct functions — high context load)
• src/hooks/wallet/useSpendBundle.ts:152 — : DLT 19 (calls 19 distinct functions — high context load)
• src/hooks/wallet/useSignSpendBundle.ts:241 — 12 duplicate lines / 50 tokens with src/hooks/wallet/useSpendBundle.ts:286
• src/hooks/wallet/useSpendBundle.ts:138 — useSpendBundle: exported fn missing return type annotation

[github-actions]

🧪 UI test report — ✅ all green

Suites

• ✅ unit: 1431 ran, 0 failed, 0 skipped, 21.7s

📊 Coverage (unit)

metric	%
statements	52.1%
branches	34.4%
functions	39.1%
lines	52.0%

⏱ 10 slowest test cases

time	test
0.3s	src/app/actions/__tests__/api-headers.test.ts › should include Content-Type in updateUserById
0.3s	src/components/Card/share-asset/__tests__/shareAssetLayout.test.ts › every stamp stays within canvas at any count
0.3s	src/app/actions/__tests__/api-headers-extended.test.ts › should not include apiKey in updateUserById body
0.1s	src/components/Global/GeneralRecipientInput/__tests__/GeneralRecipientInput.test.tsx › should handle valid 9-digit US account
0.1s	src/components/Global/GeneralRecipientInput/__tests__/GeneralRecipientInput.test.tsx › should handle too long for US account
0.1s	src/components/Global/GeneralRecipientInput/__tests__/GeneralRecipientInput.test.tsx › should handle valid Italian IBAN
0.1s	src/app/(mobile-ui)/qr-pay/__tests__/qr-pay-states.test.tsx › Perk claim in progress shows disabled button + progress
0.1s	src/components/Global/GeneralRecipientInput/__tests__/GeneralRecipientInput.test.tsx › should handle valid German IBAN
0.1s	src/components/Global/GeneralRecipientInput/__tests__/GeneralRecipientInput.test.tsx › should handle invalid ETH address (invalid characters)
0.1s	src/components/Request/__tests__/request-states.test.tsx › API failure shows error message and toast

_{📍 Inline annotations are in the **Unit test report** check above. Coverage artifact: `coverage-unit`. Generated by `.github/workflows/tests.yml`.}

[jjramirezn]

Superseded by #2234 — keeping smart-first and fixing the root cause (route on a live on-chain balance) instead of reverting. Branch retained as an emergency fallback.