An Empirical Cost Attribution of Context-Compression Gateways in Multi-Turn Coding Agents
On the map: LLM agents and tool use → Agent memory systems
Abstract (arXiv)
Context compression is widely proposed as a way to cut the token bill of LLM coding agents, and public benchmarks report that aggressive compression preserves task-solving quality. These two facts do not imply the third one commonly assumed: that compressing file reads saves money in a real multi-turn agent. We instrument a production compression gateway (Paritok) between coding agents (Claude Code, Codex) and frontier LLMs (Claude Sonnet, GPT-5), and decompose the token bill of real sessions into three independent levers: tool-schema filtering, content compression of file reads and tool output, and history summarization. Measured in isolation under controlled A/B runs, the three save at fundamentally different rates. Tool-schema filtering removes a fixed block every turn, roughly 21K-57K tokens on a typical turn; it is linear in the turn count N and the only unambiguously and reproducibly positive lever. Content compression saves only about 2% of the cache-priced prefix per turn, but compressed reads accumulate in history and are re-sent on every later turn, so its cumulative saving grows quadratically, about 3350*N^2 tokens (measured), overtaking the fixed tool-filter saving within roughly 6 turns until the context window caps it. A non-destructive gateway lets the agent pull original bytes back on demand; each recall re-sends exactly the one segment just compressed away, so its cost is fixed and bounded rather than a multiplicative blowup, and heavy recall spends the accumulated saving back one segment at a time. Finally, a strong single-shot compression benchmark - 86.5% of SWE-bench quality retained at a 25.7% compression rate, achieved by the model this gateway deploys (Paritok-4B, reported separately) - is orthogonal to multi-turn agent cost and must not be cited as a cost-saving argument. We distill the results into an actionable recipe for where token-saving effort pays off.
Key facts. No citing papers in the map yet (data through 7 Oct 2026). Placed in Agent memory systems, one of 16 directions in LLM agents and tool use. Builds on 8 of its 14 references that are in the map. First posted on arXiv 19 Aug 2026.
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8 of 14 references.
References · 8
- 2022ReAct: Synergizing Reasoning and Acting in Language Modelscited by 8,355
- 2025Qwen3 Technical Reportcited by 8,195
- 2023SWE-bench: Can Language Models Resolve Real-World GitHub Issues?cited by 3,193
- 2023Learning to Compress Prompts with Gist Tokenscited by 379
- 2023Adapting Language Models to Compress Contextscited by 350
- 2024LLMLingua-2: Data Distillation for Efficient and Faithful Task-Agnostic Prompt Compressioncited by 343
- 2023LLMLingua: Compressing Prompts for Accelerated Inference of Large Language Modelscited by 279
- 2023Compressing Context to Enhance Inference Efficiency of Large Language Modelscited by 185
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- 2026Token Reduction Is Not Cost Reduction
- 2026Paritok-4B: Intent-Conditioned Context Compression for Coding Agents
- 2026Beyond Token Savings: A Systematic Study of Context Compression in LLM Agents
- 2025More with Less: An Empirical Study of Turn-Control Strategies for Efficient Coding Agents
- 2026Prompt Compression in Production Task Orchestration: A Pre-Registered Randomized Trial
- 2026Control Under Compression: Reliability Frontiers for Tool-Using Agents
- 2026CliffCompaction: Cost-Efficient Compaction for Long-Horizon Coding Agents
- 2026What Does Context Compression Cost an Agent? Interaction Costs Unrevealed by Task-Completion Metrics