diff --git a/.github/PULL_REQUEST_TEMPLATE.md b/.github/PULL_REQUEST_TEMPLATE.md
index 85d2babb..acf7a06c 100644
--- a/.github/PULL_REQUEST_TEMPLATE.md
+++ b/.github/PULL_REQUEST_TEMPLATE.md
@@ -11,6 +11,7 @@ requesting review:
 - [ ] `make audit` (CT-72 require_auth() coverage) passes.
 - [ ] Every amount-handling path uses checked arithmetic (CT-73) — no raw
       `+`/`-` on amounts.
+- [ ] Interface and compatibility changes are documented in [`contracts/COMPATIBILITY.md`](../contracts/COMPATIBILITY.md) (or verified unchanged).
 - [ ] Not applicable — this PR does not touch `contracts/`.
 
 ## Test plan
diff --git a/contracts/COMPATIBILITY.md b/contracts/COMPATIBILITY.md
new file mode 100644
index 00000000..6faff0f5
--- /dev/null
+++ b/contracts/COMPATIBILITY.md
@@ -0,0 +1,71 @@
+# Contract ↔ Backend Compatibility Matrix
+
+This document tracks compatibility between deployed Soroban smart contracts and the NestJS backend client releases, ensuring clean lifecycle management, non-breaking integrations, and deterministic migration paths across releases (#2028).
+
+---
+
+## 1. Compatibility Matrix
+
+| Contract | Contract Version | Soroban SDK | WASM Hash / Deployment ID | Required Entrypoints | Compatible Backend Versions | Migration Notes |
+| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
+| `payment_escrow` | `0.1.0` | `v22.0.0` | `current-standalone-deploy` | `create`, `release`, `refund`, `get_status`, `get_escrow` | `>= 0.0.1` | Baseline initial release. Supports single-asset payment escrow and partial release capabilities. |
+| `revenue_distribution` | `0.1.0` | `v22.0.0` | `current-standalone-deploy` | `initialize`, `configure`, `distribute`, `version` | `>= 0.0.1` | Baseline revenue sharing protocol with deterministic share allocation. |
+
+---
+
+## 2. Detailed Interface Contracts
+
+### 2.1 `payment_escrow` (v0.1.0)
+
+- **Backend Consumer**: [`backend/src/payments/soroban/escrow-contract.client.ts`](../backend/src/payments/soroban/escrow-contract.client.ts)
+- **Environment Key**: `STELLAR_ESCROW_CONTRACT_ID`
+- **Public Entrypoints**:
+  ```rust
+  fn create(env: Env, escrow_id: BytesN<32>, payer: Address, beneficiary: Address, amount: i128)
+  fn release(env: Env, escrow_id: BytesN<32>)
+  fn refund(env: Env, escrow_id: BytesN<32>)
+  fn get_status(env: Env, escrow_id: BytesN<32>) -> u32
+  fn get_escrow(env: Env, id: BytesN<32>) -> Escrow
+  ```
+- **Status Code Mapping**:
+  | On-Chain Status Code | Backend Enum Name (`EscrowStatus`) | Description |
+  | :--- | :--- | :--- |
+  | `0` | `UNINITIALIZED` | Escrow ID has not been created |
+  | `1` | `PENDING` | Funds locked; awaiting release or refund |
+  | `2` | `RELEASED` | Funds paid out to beneficiary |
+  | `3` | `REFUNDED` | Funds returned to payer |
+
+### 2.2 `revenue_distribution` (v0.1.0)
+
+- **Backend Consumer**: Configured via contract client bindings for split payout settlement.
+- **Environment Key**: `STELLAR_REVENUE_CONTRACT_ID`
+- **Public Entrypoints**:
+  ```rust
+  fn initialize(env: Env, admin: Address)
+  fn configure(env: Env, recipients: Vec<Recipient>, total_shares: u32)
+  fn distribute(env: Env, token: Address, amount: i128)
+  fn version(env: Env) -> u32
+  ```
+
+---
+
+## 3. Migration & In-Flight Escrow Settlement Policy
+
+When introducing a new contract version with breaking changes or modified WASM bytecode:
+
+1. **Dual-Contract Settlement (In-Flight Coexistence)**:
+   - Existing escrows created under contract version `N` must remain settleable (`release` or `refund`) through their original contract address.
+   - The backend stores `contract_id` per escrow record in the database instead of relying solely on the global `STELLAR_ESCROW_CONTRACT_ID`.
+2. **State & Storage Migration**:
+   - Because Soroban persistent storage keys are scoped to the deployed contract instance, upgrading a contract without state migration requires deprecating creation on the old contract (`pause`) while permitting existing escrows to conclude.
+3. **Graceful Upgrades**:
+   - New feature releases that do not alter existing entrypoint signatures maintain backward compatibility across backend patch versions (`0.0.x`).
+
+---
+
+## 4. Checklist for Contract PR Authors
+
+Every pull request modifying files under `contracts/` must:
+- [ ] Check whether any public entrypoint signature or return type changed.
+- [ ] If changing entrypoints or adding fields, update `contracts/COMPATIBILITY.md` with the new version and backend requirement.
+- [ ] Update `contracts/CHANGELOG.md` with explicit notes for integrators.
diff --git a/contracts/README.md b/contracts/README.md
index f64e0308..cd5603ec 100644
--- a/contracts/README.md
+++ b/contracts/README.md
@@ -1,6 +1,6 @@
 # Soroban Contracts — Backend Integration Reference
 
-This directory contains the Soroban smart contract workspace for ManageHub.
+This directory contains the Soroban smart contract workspace for ManageHub. For contract versioning, WASM hashes, and backend release compatibility details, see [`COMPATIBILITY.md`](COMPATIBILITY.md).
 
 ## Backend ↔ Contract Interface