Token optimization refers to the strategic techniques used to minimize the number of tokens consumed during interactions with large language models without compromising task output. It sits at the intersection of cost management and architectural efficiency, involving methods like prompt caching, context pruning, and enforcing structured output formats to reduce extraneous data.
Implement these strategies when working with large codebases or long-running agentic loops where token costs can escalate rapidly. The main trade-off is the balance between aggressive pruning and the model's ability to retain sufficient semantic context. Being overly restrictive with the input data may lead the model to lose track of global project structure or relevant code dependencies.
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