Agentic System as Compressor: Quantifying System Intelligence in Bits

Tool-using language-model agents are governed not only by task prompts but also by persistent system-side instructions that specify tools, arguments, policies, execution protocols, and recovery. Compressing these agent control contexts (ACCs) can reduce input cost and context use, yet existing prompt-compression evaluations do not reveal whether the resulting control remains operationally reliable. We introduce CompressAgent, an environment-verified benchmark for ACC compression across nine independently constructed ACCs, three task families, three fixed Qwen API model identifiers, six retained-context budgets, and 15,525 runs. We uncover a nonlinear, method-dependent reliability frontier. At 75% retained context, generic rewriting and section-based compression achieve 92.7% and 92.4% success, close to the 93.8% full-context baseline. Between 50% and 35%, methods diverge sharply; at 35%, section-based, obligation-aware, and generic rewriting achieve 47.0%, 39.0%, and 19.9%. At retained-context budgets from 25% to 10%, executable protocols become fragile. Reliability also varies substantially across ACCs, making universal compressor rankings inappropriate and motivating per-context qualification. Failure analysis shows that compression primarily surfaces as tool-execution and action-parsing errors. These findings recast ACC compression from token reduction into a runtime-reliability problem that must be evaluated through executable outcomes.

The token-level extractive compressors widely used for general LM context are structurally inappropriate for LLM agents: across 17 (env, backbone, method) cells spanning two independent token-level method families, every cell collapses to mean reward <= 0.05 despite 1.3-13.3x realized compression. We name and characterize this failure mode as action-grammar destruction -- the tokens carrying action semantics (identifiers, brackets, action verbs) are exactly those self-information ranks lowest, so a general-purpose compressor reliably removes them and the environment rejects the residual. The diagnosis points to step-granularity compression. We introduce AGORA, an inference-free step-level compressor combining a structural prompt parser, an always-keep floor for format- and recency-critical content, and a 125M-parameter relevance scorer trained on counterfactual next-action-change labels (~2ms/step, zero per-step LLM toll). Across the compared inference-free and LLM-based methods, AGORA is the only one retaining >= 75% uncompressed performance in 8 of 9 cells (with the lone exception at 73%); a four-way component ablation isolates the structural floor as the dominant quality lever and the learned scorer as the source of 1.0-11.5x adaptive end-to-end compression from a single fixed keep ratio.

Large language models in Agentic AI systems consume tool schemas and execution results and emit tool invocations as structured data. The default language for that exchange, JSON, was designed for application-to-application interchange rather than token efficiency, so its structural elements impose substantial token overhead. Recent work proposes token-optimized alternatives such as TOON (Token-Oriented Object Notation) and TRON (Token Reduced Object Notation) as more compact replacements, but these formats have been evaluated only on isolated comprehension or generation tasks. Whether their token reductions hold inside end-to-end agentic loops therefore remains an open question. We evaluate TOON and TRON on four agentic benchmarks (BFCL, MCPToolBenchPP, MCP-Universe, StableToolBench) and five open-weight LLMs, decoupling input compression from output compression to measure comprehension and generation independently. TRON reduces tokens by up to 27% with accuracy within 14pp of the JSON baseline. TOON achieves up to 18% reduction at a similar 9pp accuracy cost, but additionally cascades on multi-turn parsing failures and collapses parallel tool-call output for most models. The code is available at: https://github.com/lkutschka/notation-matters