diff --git a/backend/models.py b/backend/models.py
index 07149e5e..c8bd530e 100644
--- a/backend/models.py
+++ b/backend/models.py
@@ -164,6 +164,7 @@ class Issue(Base):
     location = Column(String, nullable=True)
     action_plan = Column(JSONEncodedDict, nullable=True)
     integrity_hash = Column(String, nullable=True)  # Blockchain integrity seal
+    previous_integrity_hash = Column(String, nullable=True)
     
     # Voice and Language Support (Issue #291)
     submission_type = Column(String, default="text")  # 'text', 'voice'
diff --git a/backend/requirements-render.txt b/backend/requirements-render.txt
index a5428240..ee1c04a5 100644
--- a/backend/requirements-render.txt
+++ b/backend/requirements-render.txt
@@ -20,3 +20,5 @@ pydub
 googletrans==4.0.2
 langdetect
 indic-nlp-library
+pydantic
+python-dotenv
diff --git a/backend/routers/issues.py b/backend/routers/issues.py
index 2ad27ca3..7fb1505f 100644
--- a/backend/routers/issues.py
+++ b/backend/routers/issues.py
@@ -114,7 +114,7 @@ async def create_issue(
                     Issue.latitude <= max_lat,
                     Issue.longitude >= min_lon,
                     Issue.longitude <= max_lon
-                ).all()
+                ).limit(100).all()
             )
 
             nearby_issues_with_distance = find_nearby_issues(
@@ -196,7 +196,8 @@ async def create_issue(
                 longitude=longitude,
                 location=location,
                 action_plan=initial_action_plan,
-                integrity_hash=integrity_hash
+                integrity_hash=integrity_hash,
+                previous_integrity_hash=prev_hash
             )
 
             # Offload blocking DB operations to threadpool
@@ -620,7 +621,7 @@ async def verify_blockchain_integrity(issue_id: int, db: Session = Depends(get_d
     # Fetch current issue data
     current_issue = await run_in_threadpool(
         lambda: db.query(
-            Issue.id, Issue.description, Issue.category, Issue.integrity_hash
+            Issue.id, Issue.description, Issue.category, Issue.integrity_hash, Issue.previous_integrity_hash
         ).filter(Issue.id == issue_id).first()
     )
 
@@ -628,11 +629,15 @@ async def verify_blockchain_integrity(issue_id: int, db: Session = Depends(get_d
         raise HTTPException(status_code=404, detail="Issue not found")
 
     # Fetch previous issue's integrity hash to verify the chain
-    prev_issue_hash = await run_in_threadpool(
-        lambda: db.query(Issue.integrity_hash).filter(Issue.id < issue_id).order_by(Issue.id.desc()).first()
-    )
-
-    prev_hash = prev_issue_hash[0] if prev_issue_hash and prev_issue_hash[0] else ""
+    if current_issue.previous_integrity_hash is not None:
+        # Optimized path: Use stored previous hash
+        prev_hash = current_issue.previous_integrity_hash
+    else:
+        # Legacy path: Fetch from DB
+        prev_issue_hash = await run_in_threadpool(
+            lambda: db.query(Issue.integrity_hash).filter(Issue.id < issue_id).order_by(Issue.id.desc()).first()
+        )
+        prev_hash = prev_issue_hash[0] if prev_issue_hash and prev_issue_hash[0] else ""
 
     # Recompute hash based on current data and previous hash
     # Chaining logic: hash(description|category|prev_hash)
diff --git a/backend/tests/test_issues_flow.py b/backend/tests/test_issues_flow.py
new file mode 100644
index 00000000..2526c9c4
--- /dev/null
+++ b/backend/tests/test_issues_flow.py
@@ -0,0 +1,177 @@
+import pytest
+import sys
+import os
+import hashlib
+from unittest.mock import MagicMock, AsyncMock, patch
+from pathlib import Path
+from fastapi.testclient import TestClient
+
+# Setup environment
+PROJECT_ROOT = Path(__file__).resolve().parents[2]
+if str(PROJECT_ROOT) not in sys.path:
+    sys.path.insert(0, str(PROJECT_ROOT))
+
+# Mock heavy dependencies before importing main
+sys.modules['magic'] = MagicMock()
+sys.modules['telegram'] = MagicMock()
+sys.modules['telegram.ext'] = MagicMock()
+sys.modules['google'] = MagicMock()
+sys.modules['google.generativeai'] = MagicMock()
+sys.modules['transformers'] = MagicMock()
+
+# Mock torch correctly for issubclass checks in scipy/sklearn
+class MockTensor:
+    pass
+mock_torch = MagicMock()
+mock_torch.Tensor = MockTensor
+sys.modules['torch'] = mock_torch
+
+sys.modules['speech_recognition'] = MagicMock()
+sys.modules['googletrans'] = MagicMock()
+sys.modules['langdetect'] = MagicMock()
+sys.modules['ultralytics'] = MagicMock()
+sys.modules['a2wsgi'] = MagicMock()
+sys.modules['firebase_functions'] = MagicMock()
+
+# Mock pywebpush
+mock_pywebpush = MagicMock()
+mock_pywebpush.WebPushException = Exception
+sys.modules['pywebpush'] = mock_pywebpush
+
+import backend.main
+from backend.main import app
+from backend.models import Issue, Base
+from backend.database import get_db, engine
+from sqlalchemy import create_engine
+from sqlalchemy.orm import sessionmaker
+
+# Use file-based SQLite for testing to ensure thread safety with run_in_threadpool
+TEST_DB_FILE = "test_issues.db"
+if os.path.exists(TEST_DB_FILE):
+    os.remove(TEST_DB_FILE)
+
+SQLALCHEMY_DATABASE_URL = f"sqlite:///{TEST_DB_FILE}"
+test_engine = create_engine(
+    SQLALCHEMY_DATABASE_URL, connect_args={"check_same_thread": False}
+)
+TestingSessionLocal = sessionmaker(autocommit=False, autoflush=False, bind=test_engine)
+
+# Override dependency
+def override_get_db():
+    try:
+        db = TestingSessionLocal()
+        yield db
+    finally:
+        db.close()
+
+app.dependency_overrides[get_db] = override_get_db
+
+@pytest.fixture(scope="module")
+def client():
+    # Create tables
+    Base.metadata.create_all(bind=test_engine)
+
+    with patch("backend.main.create_all_ai_services") as mock_create:
+        mock_create.return_value = (AsyncMock(), AsyncMock(), AsyncMock())
+        # Also patch RAG service retrieve to avoid errors
+        with patch("backend.routers.issues.rag_service.retrieve", return_value=None):
+            with TestClient(app) as c:
+                yield c
+
+    # Cleanup
+    Base.metadata.drop_all(bind=test_engine)
+    if os.path.exists(TEST_DB_FILE):
+        os.remove(TEST_DB_FILE)
+
+def test_create_issues_and_blockchain_chaining(client):
+    # 1. Create first issue
+    data1 = {
+        "description": "First test issue for blockchain",
+        "category": "Road",
+        "latitude": 10.0,
+        "longitude": 20.0
+    }
+    response1 = client.post("/api/issues", data=data1)
+    assert response1.status_code == 201
+    issue1_id = response1.json()["id"]
+
+    # Verify issue 1 has integrity hash and empty previous hash (or logic handling it)
+    with TestingSessionLocal() as db:
+        issue1 = db.query(Issue).filter(Issue.id == issue1_id).first()
+        assert issue1.integrity_hash is not None
+        # First issue might have empty prev hash depending on DB state,
+        # but here DB is fresh so it should be empty string or similar.
+        expected_prev = ""
+        expected_content = f"{data1['description']}|{data1['category']}|{expected_prev}"
+        expected_hash = hashlib.sha256(expected_content.encode()).hexdigest()
+        assert issue1.integrity_hash == expected_hash
+
+        # Capture hash for next step
+        prev_hash_for_2 = issue1.integrity_hash
+
+    # 2. Create second issue
+    data2 = {
+        "description": "Second test issue for blockchain",
+        "category": "Water",
+        "latitude": 10.1, # Different enough to avoid dedupe
+        "longitude": 20.1
+    }
+    response2 = client.post("/api/issues", data=data2)
+    assert response2.status_code == 201
+    issue2_id = response2.json()["id"]
+
+    # Verify issue 2 links to issue 1
+    with TestingSessionLocal() as db:
+        issue2 = db.query(Issue).filter(Issue.id == issue2_id).first()
+        assert issue2.previous_integrity_hash == prev_hash_for_2
+
+        # Verify integrity hash computation
+        expected_content_2 = f"{data2['description']}|{data2['category']}|{prev_hash_for_2}"
+        expected_hash_2 = hashlib.sha256(expected_content_2.encode()).hexdigest()
+        assert issue2.integrity_hash == expected_hash_2
+
+    # 3. Call verification endpoint for Issue 2
+    verify_response = client.get(f"/api/issues/{issue2_id}/blockchain-verify")
+    assert verify_response.status_code == 200
+    verify_data = verify_response.json()
+    assert verify_data["is_valid"] is True
+    assert verify_data["computed_hash"] == verify_data["current_hash"]
+    assert "Integrity verified" in verify_data["message"]
+
+def test_update_issue_status(client):
+    # Create an issue first
+    data = {
+        "description": "Status update test issue",
+        "category": "Garbage",
+        "latitude": 11.0,
+        "longitude": 21.0
+    }
+    create_res = client.post("/api/issues", data=data)
+    issue_id = create_res.json()["id"]
+
+    # Get reference_id
+    with TestingSessionLocal() as db:
+        issue = db.query(Issue).filter(Issue.id == issue_id).first()
+        ref_id = issue.reference_id
+        initial_status = issue.status
+        assert initial_status == "open"
+
+    # Update status to verified
+    update_data = {
+        "reference_id": ref_id,
+        "status": "verified",
+        "notes": "Verified by test"
+    }
+
+    # Patch background tasks to avoid sending emails/notifications which might fail without creds
+    with patch("backend.routers.issues.send_status_notification"):
+        response = client.put("/api/issues/status", json=update_data)
+
+    assert response.status_code == 200
+    assert response.json()["status"] == "verified"
+
+    # Verify DB update
+    with TestingSessionLocal() as db:
+        issue = db.query(Issue).filter(Issue.id == issue_id).first()
+        assert issue.status == "verified"
+        assert issue.verified_at is not None
diff --git a/backend/tests/test_new_features.py b/backend/tests/test_new_features.py
index f6640d64..513083a2 100644
--- a/backend/tests/test_new_features.py
+++ b/backend/tests/test_new_features.py
@@ -22,6 +22,28 @@
 sys.modules['telegram'] = mock_telegram
 sys.modules['telegram.ext'] = mock_telegram.ext
 
+sys.modules['google'] = MagicMock()
+sys.modules['google.generativeai'] = MagicMock()
+sys.modules['transformers'] = MagicMock()
+
+class MockTensor:
+    pass
+mock_torch = MagicMock()
+mock_torch.Tensor = MockTensor
+sys.modules['torch'] = mock_torch
+
+sys.modules['speech_recognition'] = MagicMock()
+sys.modules['googletrans'] = MagicMock()
+sys.modules['langdetect'] = MagicMock()
+sys.modules['ultralytics'] = MagicMock()
+sys.modules['a2wsgi'] = MagicMock()
+sys.modules['firebase_functions'] = MagicMock()
+
+# Mock pywebpush
+mock_pywebpush = MagicMock()
+mock_pywebpush.WebPushException = Exception
+sys.modules['pywebpush'] = mock_pywebpush
+
 # Import main (will trigger app creation, but lifespan won't run yet)
 import backend.main
 from backend.main import app