# SkillSmith: Enhancing Locally Deployed Agents via Automatic Skill Construction and Evolution

arXiv: https://arxiv.org/abs/2608.08037 · HTML: https://mlsanity.com/paper/2608.08037/

## Key facts

- No citing papers in the map yet (data through 14 Oct 2026).
- Placed in Agent skill learning and evolution, one of 16 directions in LLM agents and tool use.
- Builds on 13 of its 38 references that are in the map.
- First posted on arXiv 8 Aug 2026.

## Placed in

- LLM agents and tool use / [Agent skill learning and evolution](https://mlsanity.com/agents/agent-skill-learning-and-evolution/)

## Builds on (most cited first, 13 of 13)

- [Terminal-Bench: Benchmarking Agents on Hard, Realistic Tasks in Command Line Interfaces](https://mlsanity.com/paper/2601.11868/) (2026)
- [SkillRL: Evolving Agents via Recursive Skill-Augmented Reinforcement Learning](https://mlsanity.com/paper/2602.08234/) (2026)
- [Trace2Skill: Distill Trajectory-Local Lessons into Transferable Agent Skills](https://mlsanity.com/paper/2603.25158/) (2026)
- [SkillOpt: Executive Strategy for Self-Evolving Agent Skills](https://mlsanity.com/paper/2605.23904/) (2026)
- [SoK: Agentic Skills -- Beyond Tool Use in LLM Agents](https://mlsanity.com/paper/2602.20867/) (2026)
- [CoEvoSkills: Self-Evolving Agent Skills via Co-Evolutionary Verification](https://mlsanity.com/paper/2604.01687/) (2026)
- [Memento: Fine-tuning LLM Agents without Fine-tuning LLMs](https://mlsanity.com/paper/2508.16153/) (2025)
- [EvoSkill: Automated Skill Discovery for Multi-Agent Systems](https://mlsanity.com/paper/2603.02766/) (2026)
- [SkillX: Automatically Constructing Skill Knowledge Bases for Agents](https://mlsanity.com/paper/2604.04804/) (2026)
- [Tool Documentation Enables Zero-Shot Tool-Usage with Large Language Models](https://mlsanity.com/paper/2308.00675/) (2023)
- [Distilling LLM Agent into Small Models with Retrieval and Code Tools](https://mlsanity.com/paper/2505.17612/) (2025)
- [On the Structural Memory of LLM Agents](https://mlsanity.com/paper/2412.15266/) (2024)
- [CE-CoLLM: Efficient and Adaptive Large Language Models Through Cloud-Edge Collaboration](https://mlsanity.com/paper/2411.02829/) (2024)

## Abstract (arXiv)

LLM-based agent frameworks now act as personal assistants for multi-step tasks. Existing agent frameworks such as OpenClaw commonly follow the Cloud Agent depolyment mode using closed-source cloud LLMs as backbone model, which may expose private user information and incur repeated LLM-calling costs. Local Agents address these deployment concerns by depolying frontier open-source SLMs on user-controlled devices, but their task effectiveness still lags far behind Cloud Agents. Through diagnostic analysis, we reveal that the limited effectiveness of Local Agents with frontier SLM backbones mainly comes from missing environment knowledge caused by limited backbone model scale including environment rules and operation procedures. To supply such knowledge non-parametrically, context-efficiently, and without expert authoring, we present SkillSmith, a Cloud--Local Agent collaboration framework that uses Skill as a context-efficient knowledge carrier, automatic constructs Skill from Cloud Agent task exploration and evolves Skill using Local Agent execution feedback to enhance a frozen Local Agent. Experiments on daily agent task datasets AppWorld and WorkBench show that the automatically generated Skill enables the Local Agent with Qwen3.6-27B(SLM) to achieve task effectiveness comparable to Cloud Agents with frontier LLMs, outperform the strongest non-parametric baselines, reduce average actions per task from 36.1 to 9.9 on AppWorld-Normal, and generalize to other SLM backbone models without rerunning Skill construction.