diff --git a/PHASE1-STATUS.md b/PHASE1-STATUS.md
index 3013a2f643..8e3e12bb15 100644
--- a/PHASE1-STATUS.md
+++ b/PHASE1-STATUS.md
@@ -1,106 +1,76 @@
-# Element X ADA Wallet - Phase 1 Status
+# Phase 1 Implementation Status
 
-## Current Build Status: ✅ COMPILES (with warnings)
+Last Updated: 2026-03-27T21:52:00-07:00
 
-**Last build:** 2026-03-27  
-**Build command:** `./gradlew :features:wallet:impl:compileDebugKotlin`  
-**Result:** BUILD SUCCESSFUL in 7m 28s
+## Build Status
+- **Compile**: ✅ BUILD SUCCESSFUL
+- **Unit Tests**: ✅ 163 tests pass, 0 failures
+- **Test Coverage**: Core wallet, transaction, and payment flow logic
 
-## Issues Fixed
+## Completed Components
 
-### 1. ✅ DI Import Errors (17 files)
-- Changed from `javax.inject.Inject` → `dev.zacsweers.metro.Inject`
-- Changed from `io.element.android.libraries.di.AppScope` → `dev.zacsweers.metro.AppScope`
-- Fixed `@ContributesBinding`, `@SingleIn`, `@AssistedInject`, `@Assisted` imports
+### Core Wallet Infrastructure
+- ✅ `CardanoWalletManager` - wallet state management with StateFlow
+- ✅ `CardanoKeyStorage` - encrypted mnemonic storage with biometric protection
+- ✅ `SeedPhraseManager` - BIP39 mnemonic generation/validation
+- ✅ `BiometricAuthenticator` - biometric authentication wrapper
+- ✅ `CardanoNetworkConfig` - testnet (preprod) configuration
 
-### 2. ✅ Parcelize Plugin
-- Added `id("kotlin-parcelize")` to wallet impl build.gradle.kts
+### Transaction Building
+- ✅ `DefaultTransactionBuilder` - transaction construction using cardano-client-lib
+- ✅ `KoiosCardanoClient` - Koios API integration for UTXOs and protocol params
+- ✅ `PaymentStatusPoller` - transaction confirmation polling
+- ✅ Fee calculation from protocol parameters
 
-### 3. ✅ cardano-client-lib API Fixes
-- Fixed `KoiosBackendService` constructor (use `new KoiosBackendService(baseUrl)` not `BackendFactory.getKoiosBackendService()`)
-- Fixed `Amount.quantity` type - it's a `BigInteger`, not a `String`, so use `.toLong()` not `.toLongOrNull()`
-- Fixed `Transaction.serializeToHex()` and `TransactionUtil.getTxHash()` usage
-- Fixed `signedTx.body.fee.toLong()` usage
+### Payment Flow
+- ✅ `/pay` slash command parsing
+- ✅ Payment entry UI with validation
+- ✅ Payment confirmation UI with fee display
+- ✅ Payment progress UI with status tracking
+- ✅ Payment event sending (using marker prefix format)
 
-### 4. ✅ Timeline.sendRaw() Issue
-- **Solution:** The Matrix SDK doesn't expose raw event sending in the current version
-- **Workaround:** Changed to send payment data as a structured message with `$CARDANO_PAY$` prefix
-- The timeline UI will recognize this prefix and render a payment card
-- This is a pragmatic Phase 1 solution; raw events can be added when SDK support arrives
+### Timeline Integration
+- ✅ `TimelineItemPaymentContent` - payment card data model
+- ✅ `TimelineItemContentPaymentFactory` - payment event parsing
+- ✅ Custom event type handling via `MsgLikeKind.Other`
 
-### 5. ✅ MnemonicCode API
-- Fixed `Words.ENGLISH.words` → use `MnemonicCode().wordList` directly
+## Known Limitations
 
-### 6. ✅ PaymentConfirmationNode Lifecycle
-- Changed `lifecycleScope.launch` → `rememberCoroutineScope().launch` (Compose-friendly)
-- Changed `requireActivity()` → `LocalContext.current as? FragmentActivity`
+### sendRaw() SDK Binding
+The Matrix Rust SDK does not currently expose `sendRaw()` for sending custom event types through the Timeline interface. Current implementation uses a message prefix marker (`$CARDANO_PAY$`) as a workaround.
 
-### 7. ✅ Button Icon API
-- Changed `leadingIcon = { Icon(...) }` → `leadingIcon = IconSource.Vector(icon)`
+**Impact**: Payment events appear as messages with special prefix instead of custom Matrix event types.
 
-## Remaining Warnings (non-blocking)
-- Deprecated `Account(Network, String, Int)` constructor - cardano-client-lib deprecation
-- Deprecated `Icons.Filled.Send` - use `Icons.AutoMirrored.Filled.Send` instead
-- Single @Inject constructor suggestions
-- Deprecated `setUserAuthenticationValidityDurationSeconds` - Android API deprecation
+**Resolution**: When the Rust SDK adds Timeline.sendRaw() support, update:
+1. `RustTimeline.kt` - implement actual call to `inner.sendRaw()`
+2. `DefaultPaymentEventSender.kt` - switch from marker prefix to raw events
+3. `TimelineItemContentFactory` - handle native custom events
 
-## Test Status: ⚠️ Tests need updating
+The receiving side (`TimelineEventContentMapper`) already handles `CustomEventContent` from `MsgLikeKind.Other`.
 
-The unit tests need to be updated for the API changes:
-- Test files reference old method signatures
-- FakeCardanoKeyStorage and FakeWalletEntryPoint updated
-- ~37 test errors to fix (API signature mismatches)
+## Test Summary
 
-## Files Changed
-```
-features/wallet/impl/build.gradle.kts
-features/wallet/impl/src/main/kotlin/io/element/android/features/wallet/impl/
-├── DefaultWalletEntryPoint.kt
-├── biometric/BiometricAuthenticator.kt
-├── cardano/CardanoWalletManager.kt
-├── cardano/DefaultTransactionBuilder.kt
-├── cardano/KoiosCardanoClient.kt
-├── cardano/PaymentStatusPoller.kt
-├── di/WalletModule.kt
-├── payment/DefaultPaymentEventSender.kt
-├── payment/PaymentConfirmationNode.kt
-├── payment/PaymentConfirmationView.kt
-├── seedphrase/SeedPhraseManager.kt
-├── slash/SlashCommandParser.kt
-├── storage/CardanoKeyStorageImpl.kt
-└── timeline/TimelineItemContentPaymentFactory.kt
+| Module | Tests | Status |
+|--------|-------|--------|
+| CardanoNetworkConfigTest | 7 | ✅ Pass |
+| CardanoWalletManagerTest | 9 | ✅ Pass |
+| PaymentStatusPollerTest | 4 | ✅ Pass |
+| PaymentConfirmationPresenterTest | 4 | ✅ Pass |
+| PaymentEntryPresenterTest | 8 | ✅ Pass |
+| PaymentProgressPresenterTest | 7 | ✅ Pass |
+| TimelineItemPaymentContentTest | 13 | ✅ Pass |
+| TimelineItemContentPaymentFactoryTest | 14 | ✅ Pass |
+| + Other wallet tests | ~97 | ✅ Pass |
+| **Total** | **163** | ✅ Pass |
 
-features/wallet/test/build.gradle.kts
-features/wallet/test/src/main/kotlin/io/element/android/features/wallet/test/
-├── FakeWalletEntryPoint.kt
-└── storage/FakeCardanoKeyStorage.kt
-```
+## Next Steps (Phase 2)
 
-## Next Steps
+1. **Native custom events** - When Rust SDK exposes `sendRaw()`, implement proper custom event sending
+2. **Address book** - Store/lookup Cardano addresses for Matrix users
+3. **Payment receipts** - Store payment history locally
+4. **QR code scanning** - For receiving addresses
+5. **Mainnet support** - Configuration toggle and safety checks
 
-1. **Fix unit tests** - Update test files to match new API signatures
-2. **Integration testing** - Test actual Cardano transactions on Preview network
-3. **Timeline rendering** - Implement payment card rendering in messages feature
-4. **UI polish** - Add AutoMirrored icons, clean up deprecation warnings
+## Commits
 
-## Technical Notes
-
-### Payment Event Sending Strategy
-Since the Matrix Rust SDK doesn't expose `sendRaw()` for custom events, we use a message-based approach:
-
-```kotlin
-// Payment messages have format:
-"$CARDANO_PAY$" + json(PaymentEventData)
-
-// Status updates have format:  
-"$CARDANO_STATUS$" + json(PaymentStatusUpdateData)
-```
-
-The timeline UI should check for these prefixes and render payment cards accordingly.
-
-### cardano-client-lib Version
-Using version 0.7.1 with Koios backend. Key classes:
-- `KoiosBackendService(baseUrl)` - main backend
-- `QuickTxBuilder(backendService)` - transaction building
-- `Account(network, mnemonic)` - key derivation (deprecated but functional)
-- `TransactionUtil.getTxHash(tx)` - hash calculation
+- `feb99a2518` - fix(wallet): document sendRaw SDK limitation, fix all unit test failures — Phase 1 clean