Cost Optimization: Prompt Caching + Compression
Cost optimization combines prompt caching 50-75% discount on repeated context with compression 40-70% token reduction to achieve 50-80% overall cost reduction. Prompt caching stores frequently-used contexts system prompts, documentation, code for reuse; compression reduces token count through summarization, chunking, and semantic compression. Combined approach works best: cache large static contexts + compress variable content.
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