Abstract
Context-reduction layers for API-based coding agents, including command-output compressors, retrieval rankers, and API-boundary proxies, are commonly evaluated by how much context or tool output they remove. We ask a different question: which interventions actually reduce end-to-end billed cost while preserving task success? Our primary evidence is a pre-specified, hash-frozen, paired campaign of 2,908 provider-billed Claude Code runs, of which 2,848 were analyzed, covering 103 tasks, seven repositories, and three models. The campaign compared a baseline with two generations of hook-based compression and an API-boundary proxy within a broader measured program of roughly 5,500 billed executions. Three findings emerge. First, prompt-cache traffic dominated cost composition, accounting for about 87% of reconstructed four-component cost (about 80% of the actual bill), with an 8.7% dollar-weighted residual not attributable from retained telemetry. Second, local payload reduction was not a reliable predictor of end-to-end billed cost. An arm that removed 38% of estimated raw tool-output tokens incurred 6.8% higher paired cost (95% CI: +2.8% to +11.3%), while per-task reduction showed only a weak association with cost change (Pearson r = 0.15). Third, aggressive compression can remove action-critical evidence: on SWE-bench-derived Go tasks, compression reduced successful patch application from 27/40 to 15/40 by corrupting verbatim edit anchors. We propose evaluating context-reduction systems by success-adjusted billed cost rather than token reduction alone.
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Jul 12, 2026cs.SE
Modern coding agents expose multiple tool surfaces -- IDE primitives, bash, and Model Context Protocol (MCP) code-execution -- and the field has shipped three contradictory claims about which one matters. We run the missing crossed comparison: an integrity-clean three-arm ablation (baseline / bash_only / code_only) on synthetic computation tasks and SWE-bench Mini modification tasks, holding model, harness, and prompts fixed, with two agents (Claude Code, OpenAI Codex CLI) so the comparison spans both regime and agent-design axes. Across the four resulting (regime, agent) cells, restricting the agent to a single execute_code MCP tool is cheaper than -- or statistically tied with -- its cheapest tool-rich rival in three cells (significantly on Artifact/Claude and SWE-bench/Codex; directionally on Artifact/Codex), with pass rates statistically tied within each cell. The lone exception is SWE-bench/Claude, where code_only is directionally costlier (+14.4%, not significant); a conditional-cost analysis localizes that gap to failure-cost on doomed-run trajectories, not a per-edit tax on successful runs. Two implications: the cheapest tool surface is jointly determined by task regime and agent design rather than by either axis alone, and the headline cost signal lives in cache-adjusted cost -- not pass rate, which is invariant across surfaces at the model sizes we evaluate. The benchmark harness, task suite, and analysis code are available at https://github.com/hyang0129/onlycodes.
Hong Yang, Qi Yu, Travis Desell
Jul 13, 2026cs.SE
Autonomous coding agents force engineering organizations to choose between API-based frontier models -- strong reasoning at high token cost -- and on-premise quantized open-weights models, which promise low-marginal-cost scaling and data sovereignty at some loss of reasoning fidelity. We study this trade-off through a single-developer, non-randomized longitudinal case study over two contiguous 28-day periods on a production monorepo: an API-based Claude Opus 4.7/4.8 configuration using Claude Code versus an on-premise GLM-5.1/5.2 configuration using Opencode, quantized to NVFP4, on NVIDIA Blackwell hardware. Analyzing LLM telemetry and Git history, we find that prompt caching (99.3% hit rate) cuts realized API cost by 88.6% to an effective $0.57 per million tokens -- below even the $2.83 amortized unit cost of the shared on-premise slice (a utilization-dependent inversion; total realized spend and total cost of ownership (TCO) are the robust quantities). At comparable gross code churn, the local configuration was associated with a far higher defect-repair burden: a Fix Commit Ratio (FCR) of 74.9% versus 45.9%, with the odds of a commit being a repair 2.6 to 4.9 times higher within every difficulty tier (Mantel-Haenszel OR = 3.61). Under Taiwan-market parameters and a symmetric labor model, on-premise deployment nonetheless saves 40.1% of true TCO under shared GPU allocation, whereas dedicated reservation costs 43.8% more than the cached API. Under shared allocation, the genuine penalty is not monetary but a measurable developer-experience burden -- timestamp indicators show more work trapped in debugging spirals and a slower commit cadence -- and an offline replay shows hybrid routing gateways trade defect rate for infrastructure savings along a cost-quality frontier rather than dominate the pure-API baseline.
Sheng-Wei Peng, Yi-Hsun Lin, Yi-Pei Lee
Jul 17, 2026cs.LG
Production LLM deployments combine two cost-reduction primitives: prompt caching (a discounted rate for re-used token prefixes) and prompt compression (fewer tokens sent). The compression literature has standardized on query-aware methods that produce a different compressed prefix per query, mechanically invalidating the prefix-strict cache on every call. We characterize this cost empirically on Anthropic's Sonnet 4.6 API and find caching is far from the rho=1.0 ideal the literature assumes: Sonnet's cache has a two-tier architecture with a sharp threshold near 3,500 tokens, below which the hit rate plateaus at rho~0.83 across 30-call sessions. Our cost model predicts, and experiments confirm, that under realistic rho, query-aware compression beats naive caching at high compression ratios (r>=6). We propose Cache-Aware Prompt Compression (CAPC), pairing query-agnostic compression with explicit cache_control plus a tier-preserving ratio bound that prevents over-compression from pushing the cached prefix into the hot tier. CAPC is the cheapest strategy in 16/16 configurations on LongBench-v2, with mean savings of 49% over cache-only, 64% over query-aware compression, and 90% over vanilla, at quality within 0.05 of the uncompressed baseline. We validate CAPC on three production workloads: an enterprise tool-using assistant with a 94k-token schema prefix (51.7% cost reduction at r=3); a graphify knowledge-graph RAG pipeline across two codebases (9.3x vs cache-all on FastAPI, 2.4x on httpx); and the public tau-bench retail benchmark (50 tasks), where CAPC is the cheapest of four strategies with reward exactly equal to vanilla (both 36/50, p=1.00) while query-aware compression is the most expensive at +40.1% over vanilla -- the first production confirmation of the crossover model's negative-ROI prediction on a public benchmark.
Yan Song