diff --git a/README.md b/README.md
index 279b77b..92dabe3 100644
--- a/README.md
+++ b/README.md
@@ -41,6 +41,15 @@ Web application (PWA) for the dance community enabling matchmaking, chat, and vi
 - ✅ **Duplicate Prevention** - users can only rate each match once
 - ✅ **Auto-completion** - matches auto-complete when both partners have rated
 
+**WebRTC P2P File Transfer:**
+- ✅ **WebRTC Signaling** - SDP/ICE exchange via Socket.IO
+- ✅ **P2P File Transfer** - RTCDataChannel with 16KB chunking (tested up to 700MB)
+- ✅ **WebRTC Detection** - automatic detection of browser capabilities
+- ✅ **Fallback UX** - user-friendly warnings when WebRTC blocked
+- ✅ **Real-time Progress** - transfer progress monitoring for sender/receiver
+- ✅ **E2E Encryption** - DTLS encryption (native WebRTC)
+- ✅ **Auto Download** - automatic file download on receiver side
+
 **Backend & Infrastructure:**
 - ✅ **PostgreSQL Database** - 7 tables with relations (Prisma ORM)
 - ✅ **RESTful API** - Express.js backend with validation
@@ -50,8 +59,8 @@ Web application (PWA) for the dance community enabling matchmaking, chat, and vi
 
 ### 🔜 Next Up
 
-- ⏳ **WebRTC Signaling** - SDP/ICE exchange via Socket.IO for P2P connections
-- ⏳ **WebRTC P2P Transfer** - real file transfer via RTCDataChannel
+- ⏳ **STUN/TURN Servers** - WebRTC NAT traversal for production
+- ⏳ **Server Upload Fallback** - alternative when WebRTC blocked
 - ⏳ **Competition Heats** - complete UI integration and real-time updates
 
 ## 🛠️ Tech Stack
@@ -64,6 +73,7 @@ Web application (PWA) for the dance community enabling matchmaking, chat, and vi
 - **Lucide React** - icons
 - **Context API** - state management (auth)
 - **Socket.IO Client** - real-time WebSocket communication
+- **WebRTC** - P2P file transfer (RTCPeerConnection, RTCDataChannel)
 
 ### Backend
 - **Node.js 20** - runtime
@@ -298,16 +308,23 @@ Adds:
    - Click "+" icon next to user to connect
    - You'll be redirected to private 1:1 chat
 
-7. **1:1 Chat - WebRTC (mockup)** 🔥
+7. **1:1 Chat - WebRTC P2P File Transfer** 🔥
    - See partner's profile at top (click username to view public profile)
    - WebRTC connection status (disconnected/connecting/connected)
-   - **Sending video via WebRTC (mockup):**
+   - **Sending video via WebRTC:**
      - Click "Send video (WebRTC)"
      - Select video file from disk
-     - See P2P transfer simulation
+     - Real P2P transfer via RTCDataChannel (supports files up to 700MB+)
+     - See real-time progress bar
+     - Receiver automatically downloads the file
+   - **WebRTC Detection:**
+     - Automatic detection if WebRTC is blocked
+     - User-friendly warning with fix suggestions
+     - Button disabled when WebRTC unavailable
    - **Fallback - link sharing:**
      - Click "Link"
      - Paste video URL (Google Drive, Dropbox, etc.)
+     - Alternative when WebRTC blocked (Opera, VPNs, privacy settings)
 
 8. **Rate Partner** (coming soon - Matches & Ratings API)
    - Click "Finish and rate"
@@ -414,9 +431,13 @@ docker compose exec backend npm run test:coverage
 - Message history for matches
 - Duplicate rating prevention
 
-### ⏳ Phase 2.5: WebRTC Implementation (NEXT)
-- WebRTC signaling (SDP/ICE exchange)
-- WebRTC P2P file transfer (RTCDataChannel)
+### ✅ Phase 2.5: WebRTC P2P File Transfer (COMPLETED)
+- WebRTC signaling (SDP/ICE exchange via Socket.IO)
+- P2P file transfer via RTCDataChannel (16KB chunking)
+- WebRTC capability detection (browser/network compatibility)
+- User-friendly fallback UX when WebRTC blocked
+- Tested up to 700MB file transfers
+- E2E encryption (DTLS)
 
 ### ⏳ Phase 3: MVP Finalization (PLANNED)
 - Security hardening
@@ -468,6 +489,6 @@ TBD
 
 ---
 
-**Current Status:** Phase 2 ✅ Completed | Phase 2.5 (WebRTC) ⏳ Next | Progress: ~72% overall
+**Current Status:** Phase 2.5 (WebRTC) ✅ Completed | Phase 3 (MVP) ⏳ Next | Progress: ~78% overall
 
-**Last Updated:** 2025-11-14
+**Last Updated:** 2025-11-15
diff --git a/docs/SESSION_CONTEXT.md b/docs/SESSION_CONTEXT.md
index 04d9e62..2847bb5 100644
--- a/docs/SESSION_CONTEXT.md
+++ b/docs/SESSION_CONTEXT.md
@@ -15,10 +15,13 @@
 
 ## Current Status
 
-**Phase:** 1.6 (Competition Heats System) - ✅ COMPLETED (Backend ✅ + Frontend ✅)
-**Previous Phase:** 1.5 (Email & WSDC & Profiles & Security & QR Check-in) - ✅ COMPLETED
-**Progress:** 100%
-**Next Goal:** Phase 2 - Core Features (Matches API, Ratings, WebRTC signaling)
+**Phase:** 2.5 (WebRTC P2P File Transfer) - ✅ COMPLETED
+**Previous Phases:**
+- Phase 2 (Matches & Ratings API) - ✅ COMPLETED
+- Phase 1.6 (Competition Heats) - ✅ COMPLETED
+- Phase 1.5 (Email & WSDC & Profiles & Security & QR Check-in) - ✅ COMPLETED
+**Progress:** ~78% overall
+**Next Goal:** Phase 3 - MVP Finalization (Security hardening, PWA, Production deployment)
 
 ### What Works Now
 - ✅ Docker Compose (nginx:8080 + frontend + backend + PostgreSQL)
@@ -35,14 +38,19 @@
 - ✅ **Event security (unique slugs, no ID enumeration) - Phase 1.5**
 - ✅ **QR code event check-in system - Phase 1.5** (requires physical presence at venue)
 - ✅ **Competition heats declaration system - Phase 1.6** (matchmaking prerequisite)
+- ✅ **Matches API (create/accept/list matches with slugs) - Phase 2**
+- ✅ **Ratings API (rate partners, 1-5 stars, comments) - Phase 2**
+- ✅ **WebRTC signaling (SDP/ICE exchange via Socket.IO) - Phase 2.5**
+- ✅ **WebRTC P2P file transfer (RTCDataChannel, 16KB chunks, up to 700MB tested) - Phase 2.5**
+- ✅ **WebRTC detection & fallback UX (auto-detect browser capabilities) - Phase 2.5**
 - ✅ Real-time chat (Socket.IO for event & match rooms)
-- ✅ WebRTC P2P transfer UI mockup
 
 ### What's Missing
-- ⏳ Matches API (create/accept/list matches)
-- ⏳ Ratings API (rate partner after collaboration)
-- ⏳ WebRTC signaling (SDP/ICE exchange via Socket.IO)
-- ⏳ Actual WebRTC P2P file transfer implementation
+- ⏳ STUN/TURN servers configuration for production (NAT traversal)
+- ⏳ Server-based upload fallback (when WebRTC blocked)
+- ⏳ Security hardening (CORS, CSRF, Helmet, CSP)
+- ⏳ PWA features (manifest, service worker, offline support)
+- ⏳ Production deployment & monitoring
 
 ---