# An Empirical Cost Attribution of Context-Compression Gateways in Multi-Turn Coding Agents

arXiv: https://arxiv.org/abs/2609.22114 · HTML: https://mlsanity.com/paper/2609.22114/

## Key facts

- No citing papers in the map yet (data through 14 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.

## Placed in

- LLM agents and tool use / [Agent memory systems](https://mlsanity.com/agents/agent-memory-systems/)
- Efficient LLM inference and serving / [Efficient reasoning and agent inference](https://mlsanity.com/inference/efficient-reasoning-and-agent-inference/)

## Builds on (most cited first, 8 of 8)

- [Qwen3 Technical Report](https://mlsanity.com/paper/2505.09388/) (2025)
- [ReAct: Synergizing Reasoning and Acting in Language Models](https://mlsanity.com/paper/2210.03629/) (2022)
- [SWE-bench: Can Language Models Resolve Real-World GitHub Issues?](https://mlsanity.com/paper/2310.06770/) (2023)
- [Learning to Compress Prompts with Gist Tokens](https://mlsanity.com/paper/2304.08467/) (2023)
- [Adapting Language Models to Compress Contexts](https://mlsanity.com/paper/2305.14788/) (2023)
- [LLMLingua-2: Data Distillation for Efficient and Faithful Task-Agnostic Prompt Compression](https://mlsanity.com/paper/2403.12968/) (2024)
- [LLMLingua: Compressing Prompts for Accelerated Inference of Large Language Models](https://mlsanity.com/paper/2310.05736/) (2023)
- [Compressing Context to Enhance Inference Efficiency of Large Language Models](https://mlsanity.com/paper/2310.06201/) (2023)

## 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.