Decentralized Autonomous Organizations (DAOs) are inclined explore Small Language Models (SLMs) as edge-native constitutional firewalls to vet proposals and mitigate semantic social engineering. While scaling inference-time compute (System 2) enhances formal logic, its efficacy in highly adversarial, cryptoeconomic governance environments remains underexplored. To address this, we introduce Sentinel-Bench, an 840-inference empirical framework executing a strict intra-model ablation on Qwen-3.5-9B. By toggling latent reasoning across frozen weights, we isolate the impact of inference-time compute against an adversarial Optimism DAO dataset. Our findings reveal a severe compute-accuracy inversion. The autoregressive baseline (System 1) achieved 100% adversarial robustness, 100% juridical consistency, and state finality in under 13 seconds. Conversely, System 2 reasoning introduced catastrophic instability, fundamentally driven by a 26.7% Reasoning Non-Convergence (cognitive collapse) rate. This collapse degraded trial-to-trial consensus stability to 72.6% and imposed a 17x latency overhead, introducing critical vulnerabilities to Governance Extractable Value (GEV) and hardware centralization. While rare (1.5% of adversarial trials), we empirically captured "Reasoning-Induced Sycophancy," where the model generated significantly longer internal monologues (averaging 25,750 characters) to rationalize failing the adversarial trap. We conclude that for edge-native SLMs operating under Byzantine Fault Tolerance (BFT) constraints, System 1 parameterized intuition is structurally and economically superior to System 2 iterative deliberation for decentralized consensus. Code and Dataset: https://github.com/smarizvi110/sentinel-bench
Large Language Models (LLMs) solve many reasoning tasks via chain-of-thought (CoT) prompting, but smaller models (about 7 to 8B parameters) still struggle with multi-step reasoning under tight compute and token budgets. Existing test time reasoning methods such as self consistency (sampling multiple rationales and voting), Tree-of-Thoughts (search over intermediate thoughts), and critique revise loops improve performance, but often at high token cost and without fine-grained step-level control. This project1 aims to address that gap: can Small Language Models (SLMs) reason reliably using the same or fewer tokens? This question is both scientific and practical. Scientifically, it probes whether process supervision and simple test-time controls (such as token budgets and rejection of redundant steps) can substitute for model scale or large sampling counts. Practically, many deployments (on-device, low-latency, or cost-constrained settings) cannot afford huge models or dozens of sampled rationales per query. A method that improves SLM reasoning at fixed cost would therefore be directly useful.
Small language models (SLMs) offer efficient deployment, yet they often lag behind their larger counterparts (LLMs) in reasoning. Existing remedies either invoke an LLM at points of reasoning divergence, incurring substantial latency and cost, or rely on standard distillation, which is limited by the SLM's capacity to accurately mimic the LLM's complex generative distribution. We address this dilemma by identifying local sufficiency: at divergence points, the LLM's preferred token often resides within the SLM's top-K next-token predictions, even when failing to emerge as the SLM top-1 choice. We therefore propose Select to Think (S2T), which reframes the LLM's role from open-ended generation to selection among the SLM's proposals, simplifying the supervision signal to discrete candidate rankings. Leveraging this, we introduce S2T-Local, which distills the selection logic into the SLM, empowering it to perform autonomous re-ranking without inference-time LLM dependency. Empirically, a 1.5B SLM's top-8 candidates contain the 32B LLM's choice with a 95% hit rate, and S2T-Local improves the 1.5B SLM's Math Avg. over greedy decoding by 24.1% relative gain, matching the efficacy of 8-path self-consistency with single-trajectory efficiency.
Reasoning-capable large language models can be induced to spend their generation budget on injected decoy tasks rather than answering the user's question, causing denial of service when no final answer is produced and denial of wallet when excess output tokens are billed. Input-side safety classifiers often miss these attacks because the injected prompts can appear syntactically benign. We build RecurGuard, a runtime monitor for detecting reasoning-chain consumption attacks when reasoning traces are exposed by the model. RecurGuard analyzes reasoning traces as they are generated and tracks three signals: recurrence rate, volume growth, and progress toward the user's query. If all three signals remain anomalous over three consecutive chunks, RecurGuard terminates generation early. We evaluate RecurGuard against OverThink and ExtendAttack across open-weight reasoning models and conduct adaptive stress tests on DS-R1-Qwen-7B. On this model, RecurGuard detects 99% of OverThink attacks and 92% of ExtendAttack instances while maintaining near-zero false positive rates on question answering, code generation, mathematics, and summarization. Adaptive evaluation reveals the limit of the defense: topical attacks retain 11.9x amplification with an approximately 50% joint miss rate, whereas full semantic evasion reduces amplification from 22.8x to 2.2x. When reasoning traces are unavailable, QDM provides a post-hoc fallback monitor based on the final output.