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Using complement operation from set theory. And assuming recent notifications limited to 100.

Set<Notification> updateNotifications(Set<Notification> persisted, Set<Notification> recent) {
    Set<Notification> newNotifications = complement(recent, persisted);
    save(newNotifications);
    persisted = persisted.addAll(newNotifications);

    if (persisted.size() <= 100) {
        return persisted;
    }

    Set<Notification> obsoleteNotifications = complement(persisted, recent);
    delete(obsoleteNotifications);
    persisted = persisted.removeAll(obsoleteNotifications);

    return persisted;
}

class Notification {
    /* Fields provided by the service */
    boolean dismissed;
}

Notification class presumably deserialized from JSON and dismissed set to false by default. After each service fetch call updateNotifications to save new notification and delete obsolete ones. Only new notifications are saved, so dismissed flag on previously persisted notifications is preserved.


With a timestamp you can implement complement and delete more efficiently.