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+# Context
+
+## What this document covers
+
+This document makes explicit the boundaries of context management in the agent loop:
+
+- what fills the context window and how space is divided
+- what is stored in session history vs. built at request time
+- when and how context compression happens
+- how token budgets are estimated
+
+These are existing concepts. This document clarifies their boundaries rather than introducing new ones.
+
+---
+
+## Context window regions
+
+The context window is the model's total input capacity. Four regions fill it:
+
+| Region | Assembled by | Stored in session? |
+|---|---|---|
+| System prompt | `BuildMessages()` — static + dynamic parts | No |
+| Summary | `SetSummary()` stores it; `BuildMessages()` injects it | Separate from history |
+| Session history | User / assistant / tool messages | Yes |
+| Tool definitions | Provider adapter injects at call time | No |
+
+`MaxTokens` (the output generation limit) must also be reserved from the total budget.
+
+The available space for history is therefore:
+
+```
+history_budget = ContextWindow - system_prompt - summary - tool_definitions - MaxTokens
+```
+
+---
+
+## ContextWindow vs MaxTokens
+
+These serve different purposes:
+
+- **MaxTokens** — maximum tokens the LLM may generate in one response. Sent as the `max_tokens` request parameter.
+- **ContextWindow** — the model's total input context capacity.
+
+These were previously set to the same value, which caused the summarization threshold to fire either far too early (at the default 32K) or not at all (when a user raised `max_tokens`).
+
+Current default when not explicitly configured: `ContextWindow = MaxTokens * 4`.
+
+---
+
+## Session history
+
+Session history stores only conversation messages:
+
+- `user` — user input
+- `assistant` — LLM response (may include `ToolCalls`)
+- `tool` — tool execution results
+
+Session history does **not** contain:
+
+- System prompts — assembled at request time by `BuildMessages`
+- Summary content — stored separately via `SetSummary`, injected by `BuildMessages`
+
+This distinction matters: any code that operates on session history — compression, boundary detection, token estimation — must not assume a system message is present.
+
+---
+
+## Turn
+
+A **Turn** is one complete cycle:
+
+> user message -> LLM iterations (possibly including tool calls) -> final assistant response
+
+This definition comes from the agent loop design (#1316). In session history, Turn boundaries are identified by `user`-role messages.
+
+Turn is the atomic unit for compression. Cutting inside a Turn can orphan tool-call sequences — an assistant message with `ToolCalls` separated from its corresponding `tool` results. Compressing at Turn boundaries avoids this by construction.
+
+`parseTurnBoundaries(history)` returns the starting index of each Turn.
+`findSafeBoundary(history, targetIndex)` snaps a target cut point to the nearest Turn boundary.
+
+---
+
+## Compression paths
+
+Three compression paths exist, in order of preference:
+
+### 1. Async summarization
+
+`maybeSummarize` runs after each Turn completes.
+
+Triggers when message count exceeds a threshold, or when estimated history tokens exceed a percentage of `ContextWindow`. If triggered, a background goroutine calls the LLM to produce a summary of the oldest messages. The summary is stored via `SetSummary`; `BuildMessages` injects it into the system prompt on the next call.
+
+Cut point uses `findSafeBoundary` so no Turn is split.
+
+### 2. Proactive budget check
+
+`isOverContextBudget` runs before each LLM call.
+
+Uses the full budget formula: `message_tokens + tool_def_tokens + MaxTokens > ContextWindow`. If over budget, triggers `forceCompression` and rebuilds messages before calling the LLM.
+
+This prevents wasted (and billed) LLM calls that would otherwise fail with a context-window error.
+
+### 3. Emergency compression (reactive)
+
+`forceCompression` runs when the LLM returns a context-window error despite the proactive check.
+
+Drops the oldest ~50% of Turns. Stores a compression note in the session summary (not in history messages) so `BuildMessages` can include it in the next system prompt.
+
+This is the fallback for when the token estimate undershoots reality.
+
+---
+
+## Token estimation
+
+Estimation uses a heuristic of ~2.5 characters per token (`chars * 2 / 5`).
+
+`estimateMessageTokens` counts:
+
+- `Content` (rune count, for multibyte correctness)
+- `ReasoningContent` (extended thinking / chain-of-thought)
+- `ToolCalls` — ID, type, function name, arguments
+- `ToolCallID` (tool result metadata)
+- Per-message overhead (role label, JSON structure)
+- `Media` items — flat per-item token estimate, added directly to the final count (not through the character heuristic, since actual cost depends on resolution and provider-specific image tokenization)
+
+`estimateToolDefsTokens` counts tool definition overhead: name, description, JSON schema of parameters.
+
+These are deliberately heuristic. The proactive check handles the common case; the reactive path catches estimation errors.
+
+---
+
+## Interface boundaries
+
+Context budget functions (`parseTurnBoundaries`, `findSafeBoundary`, `estimateMessageTokens`, `isOverContextBudget`) are **pure functions**. They take `[]providers.Message` and integer parameters. They have no dependency on `AgentLoop` or any other runtime struct.
+
+`BuildMessages` is the sole assembler of the final message array sent to the LLM. Budget functions inform compression decisions but do not construct messages.
+
+`forceCompression` and `summarizeSession` mutate session state (history and summary). `BuildMessages` reads that state to construct context. The flow is:
+
+```
+budget check --> compression decision --> mutate session --> BuildMessages reads session --> LLM call
+```
+
+---
+
+## Known gaps
+
+These are recognized limitations in the current implementation, documented here for visibility:
+
+- **Summarization trigger does not use the full budget formula.** `maybeSummarize` compares estimated history tokens against a percentage of `ContextWindow`. It does not account for system prompt size, tool definition overhead, or `MaxTokens` reserve. The proactive check covers the critical path (preventing 400 errors), but the summarization trigger could be aligned with the same budget model for more accurate early compression.
+
+- **Token estimation is heuristic.** It does not account for provider-specific tokenization, exact system prompt size (assembled separately), or variable image token costs. The two-path design (proactive + reactive) is intended to tolerate this imprecision.
+
+- **Reactive retry does not preserve media.** When the reactive path rebuilds context after compression, it currently passes empty values for media references. This is a pre-existing issue in the main loop, not introduced by the budget system.
+
+---
+
+## What this document does not cover
+
+- How `AGENT.md` frontmatter configures context parameters — that is part of the Agent definition work
+- How the context builder assembles context in the new architecture — that is upcoming work
+- How compression events surface through the event system — that is part of the event model (#1316)
+- Subagent context isolation — that is a separate track