diff --git a/server/src/engine/orchestrator.ts b/server/src/engine/orchestrator.ts
index 2b870ba..2fbc6d8 100644
--- a/server/src/engine/orchestrator.ts
+++ b/server/src/engine/orchestrator.ts
@@ -8,6 +8,7 @@ import { fightEvents } from './events.js'
 import { generateMockBotResponse } from './mock.js'
 import { setCooldown } from './queue.js'
 import { isHumanPlayer, waitForHumanResponse } from './human-responses.js'
+import { payWinner, refundEntry, ENTRY_FEE_SATS } from './payments.js'
 
 interface BotRecord {
   id: string
@@ -247,7 +248,7 @@ async function loadBots(botAId: string, botBId: string): Promise<[BotRecord, Bot
   return [botARows[0] as BotRecord, botBRows[0] as BotRecord]
 }
 
-async function createFightRecord(botA: BotRecord, botB: BotRecord, arena: Arena): Promise<string> {
+async function createFightRecord(botA: BotRecord, botB: BotRecord, arena: Arena, mode: 'free' | 'ranked' = 'free'): Promise<string> {
   const fightId = nanoid(12)
   const now = new Date().toISOString()
   await db.insert(schema.fights).values({
@@ -256,6 +257,9 @@ async function createFightRecord(botA: BotRecord, botB: BotRecord, arena: Arena)
     botBId: botB.id,
     arena: arena.id,
     status: 'live',
+    mode,
+    potSats: mode === 'ranked' ? 42 : 0,
+    payoutStatus: mode === 'ranked' ? 'pending' : undefined,
     startedAt: now,
     createdAt: now,
   })
@@ -287,7 +291,7 @@ async function trackWebhookResult(botId: string, webhookUrl: string, succeeded:
   }
 }
 
-async function executeFightRounds(fightId: string, botA: BotRecord, botB: BotRecord, arena: Arena): Promise<void> {
+async function executeFightRounds(fightId: string, botA: BotRecord, botB: BotRecord, arena: Arena, mode: 'free' | 'ranked' = 'free'): Promise<void> {
   let hpA = 200
   let hpB = 200
   let comboA = 0
@@ -442,6 +446,16 @@ async function executeFightRounds(fightId: string, botA: BotRecord, botB: BotRec
       db.update(schema.bots).set({ lastFightAt: new Date().toISOString() }).where(eq(schema.bots.id, botA.id)).run()
       db.update(schema.bots).set({ lastFightAt: new Date().toISOString() }).where(eq(schema.bots.id, botB.id)).run()
     }
+
+    // Update sats wagered for ranked fights
+    if (mode === 'ranked') {
+      db.update(schema.bots).set({
+        satsWagered: sql`${schema.bots.satsWagered} + ${ENTRY_FEE_SATS}`,
+      }).where(eq(schema.bots.id, botA.id)).run()
+      db.update(schema.bots).set({
+        satsWagered: sql`${schema.bots.satsWagered} + ${ENTRY_FEE_SATS}`,
+      }).where(eq(schema.bots.id, botB.id)).run()
+    }
   })
 
   finalize()
@@ -451,12 +465,32 @@ async function executeFightRounds(fightId: string, botA: BotRecord, botB: BotRec
     winnerName,
     isPerfect,
     finalHp: { a: hpA, b: hpB },
+    mode,
+    potSats: mode === 'ranked' ? 42 : 0,
   })
 
+  // Ranked fight payout
+  if (mode === 'ranked') {
+    if (winnerId) {
+      payWinner(fightId, winnerId).catch(err => {
+        console.error(`[payments] payout failed for fight ${fightId}:`, err)
+      })
+    } else {
+      // Draw — refund both entry fees
+      const entryPayments = await db.select().from(schema.payments)
+        .where(sql`${schema.payments.fightId} = ${fightId} AND ${schema.payments.direction} = 'in' AND ${schema.payments.status} = 'confirmed'`)
+      for (const payment of entryPayments) {
+        refundEntry(payment.id).catch(err => {
+          console.error(`[payments] draw refund failed for ${payment.id}:`, err)
+        })
+      }
+    }
+  }
+
   fightEvents.cleanup(fightId)
 }
 
-export async function runFight(botAId: string, botBId: string): Promise<string> {
+export async function runFight(botAId: string, botBId: string, mode: 'free' | 'ranked' = 'free'): Promise<string> {
   if (botAId === botBId) throw new Error('A bot cannot fight itself')
   if (activeFighters.has(botAId)) throw new Error(`Bot ${botAId} is already in a fight`)
   if (activeFighters.has(botBId)) throw new Error(`Bot ${botBId} is already in a fight`)
@@ -467,8 +501,8 @@ export async function runFight(botAId: string, botBId: string): Promise<string>
   try {
     const [botA, botB] = await loadBots(botAId, botBId)
     const arena = randomArena()
-    const fightId = await createFightRecord(botA, botB, arena)
-    await executeFightRounds(fightId, botA, botB, arena)
+    const fightId = await createFightRecord(botA, botB, arena, mode)
+    await executeFightRounds(fightId, botA, botB, arena, mode)
     return fightId
   } finally {
     activeFighters.delete(botAId)
@@ -479,7 +513,7 @@ export async function runFight(botAId: string, botBId: string): Promise<string>
 }
 
 /** Creates the fight record and returns the ID immediately. Rounds run in background. */
-export async function runFightAsync(botAId: string, botBId: string): Promise<string> {
+export async function runFightAsync(botAId: string, botBId: string, mode: 'free' | 'ranked' = 'free'): Promise<string> {
   if (botAId === botBId) throw new Error('A bot cannot fight itself')
   if (activeFighters.has(botAId)) throw new Error(`Bot ${botAId} is already in a fight`)
   if (activeFighters.has(botBId)) throw new Error(`Bot ${botBId} is already in a fight`)
@@ -489,9 +523,9 @@ export async function runFightAsync(botAId: string, botBId: string): Promise<str
 
   const [botA, botB] = await loadBots(botAId, botBId)
   const arena = randomArena()
-  const fightId = await createFightRecord(botA, botB, arena)
+  const fightId = await createFightRecord(botA, botB, arena, mode)
 
-  executeFightRounds(fightId, botA, botB, arena)
+  executeFightRounds(fightId, botA, botB, arena, mode)
     .catch(err => {
       console.error(`[botfights] fight ${fightId} error:`, err)
       // Mark fight as cancelled so it doesn't stay 'live' forever
diff --git a/server/src/engine/ranked-queue.ts b/server/src/engine/ranked-queue.ts
new file mode 100644
index 0000000..a034db7
--- /dev/null
+++ b/server/src/engine/ranked-queue.ts
@@ -0,0 +1,146 @@
+import { db, schema } from '../db/index.js'
+import { eq } from 'drizzle-orm'
+import { runFightAsync, isInFight } from './orchestrator.js'
+import { checkPaymentStatus, refundEntry } from './payments.js'
+
+interface RankedQueueEntry {
+  botId: string
+  botName: string
+  webhookUrl: string
+  eloRating: number
+  joinedAt: number
+  paymentId: string
+  resolve: (fightId: string) => void
+  reject: (error: Error) => void
+  timeoutHandle: ReturnType<typeof setTimeout>
+}
+
+const rankedQueue: RankedQueueEntry[] = []
+const RANKED_TIMEOUT_MS = 60_000
+
+// Post-fight cooldown tracking (shared with free queue)
+const rankedCooldowns = new Map<string, number>()
+const COOLDOWN_MS = 15_000
+
+export function setRankedCooldown(botId: string) {
+  rankedCooldowns.set(botId, Date.now() + COOLDOWN_MS)
+}
+
+export function getRankedQueueStatus(): { waiting: number } {
+  return { waiting: rankedQueue.length }
+}
+
+/**
+ * Join the ranked queue. Requires a confirmed payment.
+ * Returns fightId when matched, or rejects with refund on timeout.
+ * NEVER matches against mock bots.
+ */
+export async function joinRankedQueue(botId: string, paymentId: string): Promise<string> {
+  // Verify payment is confirmed
+  const status = await checkPaymentStatus(paymentId)
+  if (status !== 'confirmed') {
+    throw new Error(`Payment not confirmed (status: ${status}). Cannot join ranked queue.`)
+  }
+
+  // Check cooldown
+  const cooldownUntil = rankedCooldowns.get(botId)
+  if (cooldownUntil && Date.now() < cooldownUntil) {
+    const waitSec = Math.ceil((cooldownUntil - Date.now()) / 1000)
+    throw new Error(`Cooldown active. Wait ${waitSec}s.`)
+  }
+
+  // Check if already in a fight
+  if (isInFight(botId)) {
+    throw new Error('Bot is already in a fight.')
+  }
+
+  // Load bot
+  const botRows = await db.select().from(schema.bots).where(eq(schema.bots.id, botId)).limit(1)
+  if (botRows.length === 0) throw new Error('Bot not found')
+  const bot = botRows[0]
+
+  if (!bot.isActive) {
+    throw new Error('Bot is deactivated due to webhook errors. Re-test your webhook to reactivate.')
+  }
+
+  // NEVER allow mock bots in ranked
+  if (bot.webhookUrl.startsWith('http://mock.local')) {
+    throw new Error('Mock bots cannot join ranked fights.')
+  }
+
+  console.log(`[ranked-queue] joinRankedQueue botId=${botId} name=${bot.name} paymentId=${paymentId}`)
+
+  // Don't allow same bot twice
+  const existing = rankedQueue.findIndex(e => e.botId === botId)
+  if (existing !== -1) {
+    const old = rankedQueue.splice(existing, 1)[0]
+    clearTimeout(old.timeoutHandle)
+    old.reject(new Error('Rejoined ranked queue'))
+  }
+
+  // Check if someone is already waiting — instant match by closest ELO
+  if (rankedQueue.length > 0) {
+    rankedQueue.sort((a, b) => {
+      const diffA = Math.abs(a.eloRating - bot.eloRating)
+      const diffB = Math.abs(b.eloRating - bot.eloRating)
+      return diffA - diffB
+    })
+
+    const opponent = rankedQueue.shift()!
+    clearTimeout(opponent.timeoutHandle)
+
+    // Start ranked fight
+    const fightId = await runFightAsync(opponent.botId, botId, 'ranked')
+    opponent.resolve(fightId)
+    return fightId
+  }
+
+  // Nobody waiting — join queue and wait up to 60s
+  return new Promise<string>((resolve, reject) => {
+    const timeoutHandle = setTimeout(async () => {
+      const idx = rankedQueue.findIndex(e => e.botId === botId)
+      if (idx !== -1) {
+        rankedQueue.splice(idx, 1)
+        // Refund the entry fee
+        try {
+          await refundEntry(paymentId)
+          reject(new Error('No ranked opponent found — entry fee refunded.'))
+        } catch (err) {
+          reject(new Error('No ranked opponent found. Refund attempted but may have failed.'))
+        }
+      }
+    }, RANKED_TIMEOUT_MS)
+
+    rankedQueue.push({
+      botId,
+      botName: bot.name,
+      webhookUrl: bot.webhookUrl,
+      eloRating: bot.eloRating,
+      joinedAt: Date.now(),
+      paymentId,
+      resolve,
+      reject,
+      timeoutHandle,
+    })
+  })
+}
+
+/**
+ * Leave the ranked queue. Triggers refund of entry payment.
+ */
+export async function leaveRankedQueue(botId: string): Promise<boolean> {
+  const idx = rankedQueue.findIndex(e => e.botId === botId)
+  if (idx === -1) return false
+  const entry = rankedQueue.splice(idx, 1)[0]
+  clearTimeout(entry.timeoutHandle)
+
+  // Refund entry fee
+  try {
+    await refundEntry(entry.paymentId)
+  } catch (err) {
+    console.error(`[ranked-queue] refund failed for ${entry.paymentId}:`, err)
+  }
+
+  entry.reject(new Error('Left ranked queue'))
+  return true
+}