diff --git a/.env.example b/.env.example
index dbd349c..ac55775 100644
--- a/.env.example
+++ b/.env.example
@@ -1,4 +1,18 @@
 DATABASE_URL=postgresql://user:password@localhost:5432/mydatabase
 
 # [dev, stage, prod]
-ENVIRONMENT=dev
\ No newline at end of file
+ENVIRONMENT=dev
+
+### use the below to generate a good salt
+# import secrets
+# print(secrets.token_urlsafe(32))
+###
+HASHIDS_SALT=default-insecure-salt
+
+### use the below to generate alphabet for encoder
+# import random
+# base61 = list("abcdefghijklmnopqrstuvwxyzABCDEFGHIJKLMNOPQRSTUVWXYZ123456789")
+# random.shuffle(base61)
+# print("".join(base61))
+###
+ENCODER_ALPHABET=CnArvIseYhld2BtZipybguVKaMx4QFkcR71DTLJEP65jUGzqmw9fSoXW83HNO
\ No newline at end of file
diff --git a/.gitignore b/.gitignore
index bb03fb6..5d878ee 100644
--- a/.gitignore
+++ b/.gitignore
@@ -140,4 +140,4 @@ dmypy.json
 # FastAPI specifics
 # .env files used for storing environment variables should not be committed to version control
 # `db` folder might be used for database files such as SQLite which should not be checked into version control
-db/
+# db/
diff --git a/.vscode/http/url.rest b/.vscode/http/url.rest
index 9b91b74..a315fa4 100644
--- a/.vscode/http/url.rest
+++ b/.vscode/http/url.rest
@@ -1,5 +1,5 @@
 ### redirect_to_original_url
-GET http://localhost:8000/
+GET http://localhost:8000/J7aDVn
 
 ### create_url_shortcode
 POST http://localhost:8000/shorten
diff --git a/app/__init__.py b/app/__init__.py
new file mode 100644
index 0000000..f1a1f42
--- /dev/null
+++ b/app/__init__.py
@@ -0,0 +1,2 @@
+# app/__init__.py
+"""App package initializer. Required for Python imports."""
\ No newline at end of file
diff --git a/app/config.py b/app/config.py
new file mode 100644
index 0000000..e93e63d
--- /dev/null
+++ b/app/config.py
@@ -0,0 +1,16 @@
+from pydantic_settings import BaseSettings
+from typing import Literal
+
+class Settings(BaseSettings):
+    database_url: str
+    environment: Literal["dev", "stage", "prod"]
+    hashids_salt: str
+    encoder_alphabet: str
+
+    class Config:
+        env_file = ".env"
+        env_file_encoding = "utf-8"
+
+
+# Singleton instance of settings
+settings = Settings()
\ No newline at end of file
diff --git a/app/db/__init__.py b/app/db/__init__.py
new file mode 100644
index 0000000..92038d9
--- /dev/null
+++ b/app/db/__init__.py
@@ -0,0 +1 @@
+from .database import database, Base, engine
\ No newline at end of file
diff --git a/dependencies/database.py b/app/db/database.py
similarity index 69%
rename from dependencies/database.py
rename to app/db/database.py
index be7aa32..f92e202 100644
--- a/dependencies/database.py
+++ b/app/db/database.py
@@ -1,15 +1,12 @@
-import os
+from app.config import settings
 from databases import Database
 from sqlalchemy import create_engine, MetaData
 from sqlalchemy.orm import declarative_base, sessionmaker
 
-DATABASE_URL = os.getenv("DATABASE_URL")
-
 # for Alembic migrations and sync operations
-engine = create_engine(DATABASE_URL)
-
+engine = create_engine(settings.database_url)
 # to use with async requests
-database = Database(DATABASE_URL)
+database = Database(settings.database_url)
 
 metadata = MetaData()
 Base = declarative_base(metadata=metadata)
diff --git a/app/main.py b/app/main.py
new file mode 100644
index 0000000..62b70a4
--- /dev/null
+++ b/app/main.py
@@ -0,0 +1,20 @@
+from fastapi import FastAPI
+from app.config import settings
+from app.db import database, Base, engine
+from app.routes import shortener_router
+
+app = FastAPI()
+
+@app.on_event("startup")
+async def startup():
+    await database.connect()
+
+    # only create missing tables in dev environment
+    if settings.environment == "dev":
+        Base.metadata.create_all(bind=engine)
+
+@app.on_event("shutdown")
+async def shutdown():
+    await database.disconnect()
+
+app.include_router(shortener_router)
\ No newline at end of file
diff --git a/app/models/__init__.py b/app/models/__init__.py
new file mode 100644
index 0000000..73498c3
--- /dev/null
+++ b/app/models/__init__.py
@@ -0,0 +1 @@
+from .url import Url
\ No newline at end of file
diff --git a/dependencies/models.py b/app/models/url.py
similarity index 69%
rename from dependencies/models.py
rename to app/models/url.py
index 0e7478b..117e247 100644
--- a/dependencies/models.py
+++ b/app/models/url.py
@@ -1,8 +1,8 @@
 from sqlalchemy import Column, Integer, String
-from dependencies.database import Base
+from app.db.database import Base
 
-class UrlMapping(Base):
-    __tablename__ = "url_mapping"
+class Url(Base):
+    __tablename__ = "urls"
 
     id = Column(Integer, primary_key=True, index=True)
     url = Column(String, nullable=False)
diff --git a/app/routes/__init__.py b/app/routes/__init__.py
new file mode 100644
index 0000000..ceb89c4
--- /dev/null
+++ b/app/routes/__init__.py
@@ -0,0 +1 @@
+from .shortener import router as shortener_router
\ No newline at end of file
diff --git a/app/routes/shortener.py b/app/routes/shortener.py
new file mode 100644
index 0000000..43d0f66
--- /dev/null
+++ b/app/routes/shortener.py
@@ -0,0 +1,47 @@
+from fastapi import APIRouter, HTTPException
+from fastapi.responses import RedirectResponse
+from sqlalchemy.exc import IntegrityError
+
+from app.db import database
+from app.models import Url
+from app.schemas import UrlPayload
+from app.services import encoder
+
+router = APIRouter()
+
+@router.get("/{shortcode}")
+async def redirect_to_original_url(shortcode: str):
+    if not encoder.is_valid(shortcode):
+        raise HTTPException(status_code=400, detail="Shortcode is not valid")
+
+    query = Url.__table__.select().where(Url.shortcode == shortcode)
+    url_result = await database.fetch_one(query)
+
+    if url_result:
+        return RedirectResponse(url=url_result.url, status_code=302)
+    else:
+        raise HTTPException(status_code=404, detail="Shortcode not found")
+
+
+@router.post("/shorten")
+async def create_url_shortcode(url_payload: UrlPayload):
+    original_url = str(url_payload.url)
+
+    query = "SELECT nextval('urls_id_seq')"
+    next_id = await database.fetch_val(query)
+    shortcode = encoder.encode(next_id)
+
+    try:
+        query = Url.__table__.insert().values({
+            "id": next_id,
+            "url": original_url,
+            "shortcode": shortcode
+        })
+        await database.execute(query)
+
+        return {"shortcode": shortcode, "original_url": original_url}
+    except IntegrityError as e:
+        if 'shortcode' in str(e):
+            raise HTTPException(status_code=409, detail="Shortcode already in use")
+        else:
+            raise HTTPException(status_code=500, detail="Internal Server Error")
\ No newline at end of file
diff --git a/app/schemas/__init__.py b/app/schemas/__init__.py
new file mode 100644
index 0000000..40e2263
--- /dev/null
+++ b/app/schemas/__init__.py
@@ -0,0 +1 @@
+from .url import UrlPayload
\ No newline at end of file
diff --git a/schemas.py b/app/schemas/url.py
similarity index 100%
rename from schemas.py
rename to app/schemas/url.py
diff --git a/app/services/__init__.py b/app/services/__init__.py
new file mode 100644
index 0000000..57df460
--- /dev/null
+++ b/app/services/__init__.py
@@ -0,0 +1 @@
+from .encoder import encoder
\ No newline at end of file
diff --git a/app/services/encoder.py b/app/services/encoder.py
new file mode 100644
index 0000000..0f2f766
--- /dev/null
+++ b/app/services/encoder.py
@@ -0,0 +1,27 @@
+from app.config import settings
+from hashids import Hashids
+
+class ShortCodeEncoder:
+    def __init__(self, salt=None, alphabet=None, min_length=6):
+        self.salt = salt or settings.hashids_salt
+        self.alphabet = alphabet or settings.encoder_alphabet
+
+        self.hashids = Hashids(salt=self.salt, min_length=min_length, alphabet=self.alphabet)
+        self.min_length = min_length
+
+    def encode(self, id: int) -> str:
+        return self.hashids.encode(id)
+
+    def decode(self, shortcode: str) -> int:
+        decoded = self.hashids.decode(shortcode)
+        return decoded[0] if decoded else None
+
+    def is_valid(self, shortcode: str) -> bool:
+        if len(shortcode) < self.min_length:
+            return False
+        if any(char not in self.alphabet for char in shortcode):
+            return False
+        return True
+
+# Singleton instance of encoder
+encoder = ShortCodeEncoder()
\ No newline at end of file
diff --git a/main.py b/main.py
deleted file mode 100644
index d644a9e..0000000
--- a/main.py
+++ /dev/null
@@ -1,57 +0,0 @@
-import os
-
-from sqlalchemy.exc import IntegrityError
-from fastapi import FastAPI, HTTPException
-from fastapi.responses import RedirectResponse
-
-from dependencies.models import UrlMapping
-from dependencies.database import database, Base, engine
-from schemas import UrlPayload
-from utils import generate_shortcode
-
-app = FastAPI()
-
-@app.on_event("startup")
-async def startup():
-    await database.connect()
-    Base.metadata.create_all(bind=engine) # TODO: create all tables if not present (ONLY DEVELOPMENT)
-
-@app.on_event("shutdown")
-async def shutdown():
-    await database.disconnect()
-
-
-
-@app.get("/{shortcode}")
-async def redirect_to_original_url(shortcode: str):
-    # TODO: do validation check for valid shortcode
-    if not shortcode:
-        raise HTTPException(status_code=400, detail="Shortcode is not valid")
-
-    query = UrlMapping.__table__.select().where(UrlMapping.shortcode == shortcode)
-    url_mapping = await database.fetch_one(query)
-
-    if url_mapping:
-        return RedirectResponse(url=url_mapping.url, status_code=302)
-    else:
-        raise HTTPException(status_code=404, detail="Shortcode not found")
-
-@app.post("/shorten")
-async def create_url_shortcode(url_payload: UrlPayload):
-    original_url = str(url_payload.url) # convert to string from HttpUrl
-    shortcode = generate_shortcode()
-
-    try:
-        query = UrlMapping.__table__.insert().values({
-            "url": original_url,
-            "shortcode": shortcode
-        })
-        await database.execute(query)
-
-        return {"shortcode": shortcode, "original_url": original_url}
-    except IntegrityError as e:
-        if 'shortcode' in str(e):
-            raise HTTPException(status_code=409, detail="Shortcode already in use")
-        else:
-            raise HTTPException(status_code=500, detail="Internal Server Error")
-    
\ No newline at end of file
diff --git a/minxadb-dev.session.sql b/minxadb-dev.session.sql
new file mode 100644
index 0000000..e69de29
diff --git a/requirements.txt b/requirements.txt
index 50786b0..8fe4d6c 100644
--- a/requirements.txt
+++ b/requirements.txt
@@ -7,12 +7,15 @@ databases==0.9.0
 fastapi==0.116.1
 greenlet==3.2.3
 h11==0.16.0
+hashids==1.3.1
 idna==3.10
 Mako==1.3.10
 MarkupSafe==3.0.2
 psycopg2-binary==2.9.10
 pydantic==2.11.7
+pydantic-settings==2.10.1
 pydantic_core==2.33.2
+python-dotenv==1.1.1
 sniffio==1.3.1
 SQLAlchemy==2.0.41
 starlette==0.47.2
diff --git a/utils.py b/utils.py
deleted file mode 100644
index 9767ef5..0000000
--- a/utils.py
+++ /dev/null
@@ -1,6 +0,0 @@
-import string
-import random
-
-def generate_shortcode(length=6) -> str:
-    characters = string.ascii_letters + string.digits
-    return ''.join(random.choice(characters) for _ in range(length))
\ No newline at end of file