server {
    listen 80;
    server_name localhost;

    # Root directory for static files
    root /usr/share/nginx/html;
    index index.html;

    # Compression settings
    gzip on;
    gzip_vary on;
    gzip_min_length 10240;
    gzip_proxied expired no-cache no-store private auth;
    gzip_types text/plain text/css text/xml text/javascript application/javascript application/x-javascript application/xml;
    gzip_disable "MSIE [1-6]\.";

    # Security headers
    add_header X-Frame-Options "SAMEORIGIN";
    add_header X-XSS-Protection "1; mode=block";
    add_header X-Content-Type-Options "nosniff";

    # Handle React Router paths
    location / {
        try_files $uri $uri/ /index.html;
    }

    # Cache static assets
    location ~* \.(js|css|png|jpg|jpeg|gif|ico|svg)$ {
        expires 30d;
        add_header Cache-Control "public, no-transform";
    }

    # API proxy
    location /api/ {
        proxy_pass http://backend:4000;
        proxy_http_version 1.1;
        proxy_set_header Upgrade $http_upgrade;
        proxy_set_header Connection 'upgrade';
        proxy_set_header Host $host;
        proxy_cache_bypass $http_upgrade;
        proxy_set_header X-Real-IP $remote_addr;
        proxy_set_header X-Forwarded-For $proxy_add_x_forwarded_for;
        proxy_set_header X-Forwarded-Proto $scheme;
    }
}