server {
    listen 80;
    server_name localhost;
    root /usr/share/nginx/html;
    index index.html;

    # API proxy
    location /api/ {
        proxy_pass http://backend:8000;
        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;
    }

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

    # Enable gzip compression
    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/x-javascript application/xml;
    gzip_disable "MSIE [1-6]\.";

    # Security headers
    add_header X-Frame-Options "SAMEORIGIN" always;
    add_header X-XSS-Protection "1; mode=block" always;
    add_header X-Content-Type-Options "nosniff" always;
    add_header Referrer-Policy "no-referrer-when-downgrade" always;
    add_header Content-Security-Policy "default-src 'self' http: https: data: blob: 'unsafe-inline'" always;

    # Cache control for static assets
    location ~* \.(jpg|jpeg|png|gif|ico|css|js|svg)$ {
        expires 7d;
        add_header Cache-Control "public, no-transform";
    }
}