diff --git a/tests/server/test_mempool.py b/tests/server/test_mempool.py
new file mode 100644
index 0000000..669d90c
--- /dev/null
+++ b/tests/server/test_mempool.py
@@ -0,0 +1,502 @@
+import logging
+import os
+from collections import defaultdict
+from functools import partial
+from random import randrange, choice
+
+import pytest
+from aiorpcx import Event, TaskGroup, sleep, spawn, ignore_after
+
+from electrumx.server.mempool import MemPool, MemPoolAPI
+from electrumx.lib.coins import BitcoinCash
+from electrumx.lib.hash import HASHX_LEN, hex_str_to_hash, hash_to_hex_str
+from electrumx.lib.tx import Tx, TxInput, TxOutput
+from electrumx.lib.util import make_logger
+
+
+coin = BitcoinCash
+tx_hash_fn = coin.DESERIALIZER.TX_HASH_FN
+
+
+def random_tx(hash160s, utxos):
+    '''Create a random TX paying to some of the hash160s using some of the
+    UTXOS.  Return the TX.  UTXOs is updated for the effects of the TX.
+    '''
+    inputs = []
+    n_inputs = min(randrange(1, 4), len(utxos))
+    input_value = 0
+    # Create inputs spending random UTXOs.  total the inpu
+    for n in range(n_inputs):
+        prevout = choice(list(utxos))
+        hashX, value = utxos.pop(prevout)
+        inputs.append(TxInput(prevout[0], prevout[1], b'', 4294967295))
+        input_value += value
+
+    fee = min(input_value, randrange(500))
+    input_value -= fee
+    outputs = []
+    n_outputs = randrange(1, 4)
+    for n in range(n_outputs):
+        value = randrange(input_value)
+        input_value -= value
+        pk_script = coin.hash160_to_P2PKH_script(choice(hash160s))
+        outputs.append(TxOutput(value, pk_script))
+
+    tx = Tx(2, inputs, outputs, 0)
+    tx_bytes = tx.serialize()
+    tx_hash = tx_hash_fn(tx_bytes)
+    for n, output in enumerate(tx.outputs):
+        utxos[(tx_hash, n)] = (coin.hashX_from_script(output.pk_script),
+                               output.value)
+    return tx, tx_hash, tx_bytes
+
+
+class API(MemPoolAPI):
+
+    def __init__(self):
+        self._height = 0
+        self._cached_height = self._height
+        # Create a pool of hash160s.  Map them to their script hashes
+        # Create a bunch of UTXOs paying to those script hashes
+        # Create a bunch of TXs that spend from the UTXO set and create
+        # new outpus, which are added to the UTXO set for later TXs to
+        # spend
+        self.db_utxos = {}
+        self.on_mempool_calls = []
+        self.hashXs = []
+        # Maps of mempool txs from tx_hash to raw and Tx object forms
+        self.raw_txs = {}
+        self.txs = {}
+        self.ordered_adds = []
+
+    def initialize(self, addr_count=100, db_utxo_count=100, mempool_size=50):
+        hash160s = [os.urandom(20) for n in range(addr_count)]
+        self.hashXs = [coin.hash160_to_P2PKH_hashX(hash160)
+                       for hash160 in hash160s]
+        prevouts = [(os.urandom(32), randrange(0, 10))
+                    for n in range (db_utxo_count)]
+        random_value = partial(randrange, coin.VALUE_PER_COIN * 10)
+        self.db_utxos = {prevout: (choice(self.hashXs), random_value())
+                         for prevout in prevouts}
+
+        unspent_utxos = self.db_utxos.copy()
+        for n in range(mempool_size):
+            tx, tx_hash, raw_tx = random_tx(hash160s, unspent_utxos)
+            self.raw_txs[tx_hash] = raw_tx
+            self.txs[tx_hash] = tx
+            self.ordered_adds.append(tx_hash)
+
+    def mempool_utxos(self):
+        utxos = {}
+        for tx_hash, tx in self.txs.items():
+            for n, output in enumerate(tx.outputs):
+                hashX = coin.hashX_from_script(output.pk_script)
+                utxos[(tx_hash, n)] = (hashX, output.value)
+        return utxos
+
+    def mempool_spends(self):
+        return [(input.prev_hash, input.prev_idx)
+                for tx in self.txs.values() for input in tx.inputs]
+
+    def balance_deltas(self):
+        # Return mempool balance deltas indexed by hashX
+        deltas = defaultdict(int)
+        utxos = self.mempool_utxos()
+        for tx_hash, tx in self.txs.items():
+            for n, input in enumerate(tx.inputs):
+                prevout = (input.prev_hash, input.prev_idx)
+                if prevout in utxos:
+                    utxos.pop(prevout)
+                else:
+                    hashX, value = self.db_utxos[prevout]
+                    deltas[hashX] -= value
+        for hashX, value in utxos.values():
+            deltas[hashX] += value
+        return deltas
+
+    def spends(self):
+        # Return spends indexed by hashX
+        spends = defaultdict(list)
+        utxos = self.mempool_utxos()
+        for tx_hash, tx in self.txs.items():
+            for n, input in enumerate(tx.inputs):
+                prevout = (input.prev_hash, input.prev_idx)
+                if prevout in utxos:
+                    hashX, value = utxos.pop(prevout)
+                else:
+                    hashX, value = self.db_utxos[prevout]
+                spends[hashX].append(prevout)
+        return spends
+
+    def summaries(self):
+        # Return lists of (tx_hash, fee, has_unconfirmed_inputs) by hashX
+        summaries = defaultdict(list)
+        utxos = self.mempool_utxos()
+        for tx_hash, tx in self.txs.items():
+            fee = 0
+            hashXs = set()
+            has_ui = False
+            for n, input in enumerate(tx.inputs):
+                has_ui = has_ui or (input.prev_hash in self.txs)
+                prevout = (input.prev_hash, input.prev_idx)
+                if prevout in utxos:
+                    hashX, value = utxos[prevout]
+                else:
+                    hashX, value = self.db_utxos[prevout]
+                hashXs.add(hashX)
+                fee += value
+
+            for output in tx.outputs:
+                hashXs.add(coin.hashX_from_script(output.pk_script))
+                fee -= output.value
+
+            summary = (tx_hash, fee, has_ui)
+            for hashX in hashXs:
+                summaries[hashX].append(summary)
+        return summaries
+
+    def touched(self, tx_hashes):
+        touched = set()
+        utxos = self.mempool_utxos()
+        for tx_hash in tx_hashes:
+            tx = self.txs[tx_hash]
+            for n, input in enumerate(tx.inputs):
+                prevout = (input.prev_hash, input.prev_idx)
+                if prevout in utxos:
+                    hashX, value = utxos[prevout]
+                else:
+                    hashX, value = self.db_utxos[prevout]
+                touched.add(hashX)
+
+            for output in tx.outputs:
+                touched.add(coin.hashX_from_script(output.pk_script))
+        return touched
+
+    def UTXOs(self):
+        # Return lists of UTXO 5-tuples by hashX
+        utxos = defaultdict(list)
+        for tx_hash, tx in self.txs.items():
+            for n, output in enumerate(tx.outputs):
+                hashX = coin.hashX_from_script(output.pk_script)
+                utxos[hashX].append((-1, n, tx_hash, 0, output.value))
+        return utxos
+
+    async def height(self):
+        await sleep(0)
+        self._cached_height = self._height
+        return self._height
+
+    def cached_height(self):
+        return self._cached_height
+
+    async def mempool_hashes(self):
+        '''Query bitcoind for the hashes of all transactions in its
+        mempool, returned as a list.'''
+        await sleep(0)
+        return [hash_to_hex_str(hash) for hash in self.txs]
+
+    async def raw_transactions(self, hex_hashes):
+        '''Query bitcoind for the serialized raw transactions with the given
+        hashes.  Missing transactions are returned as None.
+
+        hex_hashes is an iterable of hexadecimal hash strings.'''
+        await sleep(0)
+        hashes = [hex_str_to_hash(hex_hash) for hex_hash in hex_hashes]
+        return [self.raw_txs.get(hash) for hash in hashes]
+
+    async def lookup_utxos(self, prevouts):
+        '''Return a list of (hashX, value) pairs each prevout if unspent,
+        otherwise return None if spent or not found.
+
+        prevouts - an iterable of (hash, index) pairs
+        '''
+        await sleep(0)
+        return [self.db_utxos.get(prevout) for prevout in prevouts]
+
+    async def on_mempool(self, touched, height):
+        '''Called each time the mempool is synchronized.  touched is a set of
+        hashXs touched since the previous call.  height is the
+        daemon's height at the time the mempool was obtained.'''
+        self.on_mempool_calls.append((touched, height))
+        await sleep(0)
+
+
+class DropAPI(API):
+
+    def __init__(self, drop_count):
+        super().__init__()
+        self.drop_count = drop_count
+        self.dropped = False
+
+    async def raw_transactions(self, hex_hashes):
+        if not self.dropped:
+            self.dropped = True
+            for hash in self.ordered_adds[-self.drop_count:]:
+                del self.raw_txs[hash]
+                del self.txs[hash]
+        return await super().raw_transactions(hex_hashes)
+
+
+def in_caplog(caplog, message):
+    return any(message in record.message for record in caplog.records)
+
+
+@pytest.mark.asyncio
+async def test_keep_synchronized(caplog):
+    api = API()
+    mempool = MemPool(coin, api)
+    event = Event()
+    with caplog.at_level(logging.INFO):
+        async with TaskGroup() as group:
+            await group.spawn(mempool.keep_synchronized, event)
+            await event.wait()
+            await group.cancel_remaining()
+
+    assert in_caplog(caplog, 'beginning processing of daemon mempool')
+    assert in_caplog(caplog, 'compact fee histogram')
+    assert in_caplog(caplog, 'synced in ')
+    assert in_caplog(caplog, '0 txs touching 0 addresses')
+    assert not in_caplog(caplog, 'txs dropped')
+
+
+@pytest.mark.asyncio
+async def test_balance_delta():
+    api = API()
+    api.initialize()
+    mempool = MemPool(coin, api)
+    event = Event()
+    async with TaskGroup() as group:
+        await group.spawn(mempool.keep_synchronized, event)
+        await event.wait()
+        await group.cancel_remaining()
+
+    # Check the default dict is handled properly
+    prior_len = len(mempool.hashXs)
+    assert await mempool.balance_delta(os.urandom(HASHX_LEN)) == 0
+    assert prior_len == len(mempool.hashXs)
+
+    # Test all hashXs
+    deltas = api.balance_deltas()
+    for hashX in api.hashXs:
+        expected = deltas.get(hashX, 0)
+        assert await mempool.balance_delta(hashX) == expected
+
+
+@pytest.mark.asyncio
+async def test_compact_fee_histogram():
+    api = API()
+    api.initialize()
+    mempool = MemPool(coin, api)
+    event = Event()
+    async with TaskGroup() as group:
+        await group.spawn(mempool.keep_synchronized, event)
+        await event.wait()
+        await group.cancel_remaining()
+
+    histogram = await mempool.compact_fee_histogram()
+    assert histogram == []
+    bin_size = 1000
+    mempool._update_histogram(bin_size)
+    histogram = await mempool.compact_fee_histogram()
+    assert len(histogram) > 0
+    rates, sizes = zip(*histogram)
+    assert all(rates[n] < rates[n - 1] for n in range(1, len(rates)))
+    assert all(size > bin_size * 0.95 for size in sizes)
+
+
+@pytest.mark.asyncio
+async def test_potential_spends():
+    api = API()
+    api.initialize()
+    mempool = MemPool(coin, api)
+    event = Event()
+    async with TaskGroup() as group:
+        await group.spawn(mempool.keep_synchronized, event)
+        await event.wait()
+        await group.cancel_remaining()
+
+    # Check the default dict is handled properly
+    prior_len = len(mempool.hashXs)
+    assert await mempool.potential_spends(os.urandom(HASHX_LEN)) == set()
+    assert prior_len == len(mempool.hashXs)
+
+    # Test all hashXs
+    spends = api.spends()
+    for hashX in api.hashXs:
+        ps = await mempool.potential_spends(hashX)
+        assert all(spend in ps for spend in spends[hashX])
+
+
+async def _test_summaries(mempool, api):
+    # Test all hashXs
+    summaries = api.summaries()
+    for hashX in api.hashXs:
+        mempool_result = await mempool.transaction_summaries(hashX)
+        mempool_result = [(item.hash, item.fee, item.has_unconfirmed_inputs)
+                          for item in mempool_result]
+        our_result = summaries.get(hashX, [])
+        assert set(our_result) == set(mempool_result)
+
+
+@pytest.mark.asyncio
+async def test_transaction_summaries(caplog):
+    api = API()
+    api.initialize()
+    mempool = MemPool(coin, api)
+    event = Event()
+    with caplog.at_level(logging.INFO):
+        async with TaskGroup() as group:
+            await group.spawn(mempool.keep_synchronized, event)
+            await event.wait()
+            await group.cancel_remaining()
+
+    # Check the default dict is handled properly
+    prior_len = len(mempool.hashXs)
+    assert await mempool.transaction_summaries(os.urandom(HASHX_LEN)) == []
+    assert prior_len == len(mempool.hashXs)
+
+    await _test_summaries(mempool, api)
+    assert not in_caplog(caplog, 'txs dropped')
+
+
+@pytest.mark.asyncio
+async def test_unordered_UTXOs():
+    api = API()
+    api.initialize()
+    mempool = MemPool(coin, api)
+    event = Event()
+    async with TaskGroup() as group:
+        await group.spawn(mempool.keep_synchronized, event)
+        await event.wait()
+        await group.cancel_remaining()
+
+    # Check the default dict is handled properly
+    prior_len = len(mempool.hashXs)
+    assert await mempool.unordered_UTXOs(os.urandom(HASHX_LEN)) == []
+    assert prior_len == len(mempool.hashXs)
+
+    # Test all hashXs
+    utxos = api.UTXOs()
+    for hashX in api.hashXs:
+        mempool_result = await mempool.unordered_UTXOs(hashX)
+        our_result = utxos.get(hashX, [])
+        assert set(our_result) == set(mempool_result)
+
+
+@pytest.mark.asyncio
+async def test_mempool_removals():
+    api = API()
+    api.initialize()
+    mempool = MemPool(coin, api, refresh_secs=0.01)
+    event = Event()
+    async with TaskGroup() as group:
+        await group.spawn(mempool.keep_synchronized, event)
+        await event.wait()
+        # Remove half the TXs from the mempool
+        start = len(api.ordered_adds) // 2
+        for tx_hash in api.ordered_adds[start:]:
+            del api.txs[tx_hash]
+            del api.raw_txs[tx_hash]
+        await event.wait()
+        await _test_summaries(mempool, api)
+        # Removed hashXs should have key destroyed
+        assert all(mempool.hashXs.values())
+        # Remove the rest
+        api.txs.clear()
+        api.raw_txs.clear()
+        await event.wait()
+        await _test_summaries(mempool, api)
+        assert not mempool.hashXs
+        assert not mempool.txs
+        await group.cancel_remaining()
+
+
+@pytest.mark.asyncio
+async def test_daemon_drops_txs():
+    # Tests things work if the daemon drops some transactions between
+    # returning their hashes and the mempool requesting the raw txs
+    api = DropAPI(10)
+    api.initialize()
+    mempool = MemPool(coin, api, refresh_secs=0.01)
+    event = Event()
+    async with TaskGroup() as group:
+        await group.spawn(mempool.keep_synchronized, event)
+        await event.wait()
+        await _test_summaries(mempool, api)
+        await group.cancel_remaining()
+
+
+@pytest.mark.asyncio
+async def test_notifications():
+    # Tests notifications over a cycle of:
+    # 1) A first batch of txs come in
+    # 2) A second batch of txs come in
+    # 3) A block comes in confirming the first batch only
+    api = API()
+    api.initialize()
+    mempool = MemPool(coin, api, refresh_secs=0.001, log_status_secs=0)
+    event = Event()
+
+    n = len(api.ordered_adds) // 2
+    raw_txs = api.raw_txs.copy()
+    txs = api.txs.copy()
+    first_hashes = api.ordered_adds[:n]
+    first_touched = api.touched(first_hashes)
+    second_hashes = api.ordered_adds[n:]
+    second_touched = api.touched(second_hashes)
+
+    async with TaskGroup() as group:
+        # First batch enters the mempool
+        api.raw_txs = {hash: raw_txs[hash] for hash in first_hashes}
+        api.txs = {hash: txs[hash] for hash in first_hashes}
+        first_utxos = api.mempool_utxos()
+        first_spends = api.mempool_spends()
+        await group.spawn(mempool.keep_synchronized, event)
+        await event.wait()
+        assert len(api.on_mempool_calls) == 1
+        touched, height = api.on_mempool_calls[0]
+        assert height == api._height == api._cached_height
+        assert touched == first_touched
+        # Second batch enters the mempool
+        api.raw_txs = raw_txs
+        api.txs = txs
+        await event.wait()
+        assert len(api.on_mempool_calls) == 2
+        touched, height = api.on_mempool_calls[1]
+        assert height == api._height == api._cached_height
+        # Touched is incremental
+        assert touched == second_touched
+        # Block found; first half confirm
+        new_height = 2
+        api._height = new_height
+        api.db_utxos.update(first_utxos)
+        for spend in first_spends:
+            del api.db_utxos[spend]
+        api.raw_txs = {hash: raw_txs[hash] for hash in second_hashes}
+        api.txs = {hash: txs[hash] for hash in second_hashes}
+        await event.wait()
+        assert len(api.on_mempool_calls) == 3
+        touched, height = api.on_mempool_calls[2]
+        assert height == api._height == api._cached_height == new_height
+        assert touched == first_touched
+        await group.cancel_remaining()
+
+
+@pytest.mark.asyncio
+async def test_dropped_txs(caplog):
+    api = API()
+    api.initialize()
+    mempool = MemPool(coin, api)
+    event = Event()
+    # Remove a single TX_HASH that is used in another mempool tx
+    for prev_hash, prev_idx in api.mempool_spends():
+        if prev_hash in api.txs:
+            del api.txs[prev_hash]
+
+    with caplog.at_level(logging.INFO):
+        async with TaskGroup() as group:
+            await group.spawn(mempool.keep_synchronized, event)
+            await event.wait()
+            await group.cancel_remaining()
+
+    assert in_caplog(caplog, 'txs dropped')