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5 Anthropic Prompt Caching Patterns That Cut My API Bill 70%
System-prompt caching alone cut repeat-call costs by half Tool definitions cache separately, perfect for agent loops Conversation history caching pays off after turn three 1-hour TTL beats the default 5 minutes for batch jobs My Anthropic API bill dropped 70 percent last month and I did not change a single model. I changed where the cache breakpoints went. Here are the five patterns I now use on every Claude integration I ship. Pattern 1: Cache The System Prompt First The system prompt is the cheapest win and most people skip it. My agents run with a 4,000 token system prompt that explains the role, the output format, the safety rules, and a few examples. That prompt never changes inside a session. Before caching, I paid full input price for those 4,000 tokens on every single call. With an agent that loops 30 times to finish a task, that is 120,000 tokens of pure repetition. The fix is one parameter. I add a cache_control block with type: "ephemeral" to the last content item in the system prompt array. The first call writes the cache and costs slightly more (cache writes carry a small premium). Every call after that reads the cache at roughly one tenth the input price. Here is the rule I follow: the cached block has to be at least 1,024 tokens for Claude Sonnet, or it gets ignored silently. My 4,000 token prompt clears that easily. If your system prompt is short, this pattern does nothing, so do not bother adding the breakpoint to a 200 token instruction. The order matters more than people expect. The cache works as a prefix. Everything before the breakpoint gets stored. Everything after it is read fresh. So I put the stable stuff (role, rules, examples) up top and the volatile stuff (user query, current date) down below the breakpoint. Reorder this wrong and your cache hit rate collapses because the prefix changes on every call. One real number from my logs: a document-classification job that runs 2,000 times a day. The system prompt is 3,800 tokens. Caching it sav
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Which AI should you choose in 2026? Claude, Perplexity, Gemini, or ChatGPT
Claude Code — My daily dev tool Claude Code by Anthropic is the one I use the most for development, by far. What sets it apart from the others: it integrates directly into the terminal and editor, it can read and modify files, navigate an entire codebase, and understand the global context of the project. Not just responding to a copy-pasted snippet in a chat window. In practice, when I have an idea, I ask it to structure the project and challenge my choices. And to be clear: I challenge it too. 😄 I sometimes disagree with its suggestions, and that's often where the conversation becomes interesting. It's a tool, not an oracle. Perplexity — My reference for research Perplexity is my main tool when I need a reliable and verifiable answer. It's a response engine that systematically cites its sources — you ask a question, it answers with excerpts from real web pages and direct links. No more hallucinations without references. However, I use it almost exclusively on desktop. On smartphone, it's flooded with messages pushing the paid version. Understandable from their side, but frankly annoying when you just want to do a quick search. 🙄 Gemini — For those in the Google ecosystem Gemini is Google's AI, and its main advantage is integration with Gmail, Docs, Drive, Sheets, and Google Search. I have a Google Pixel, and on that side, it does integrate very well with its own ecosystem. It's practical for analyzing documents or getting a quick summary without leaving the interface. That said, in terms of responses, it sometimes falters. 😬 Not systematically, but regularly enough that I stay on guard. And if privacy is a priority for you, it's worth thinking twice before entrusting it with your documents — I talk about this in my article on securing yourself on the Internet . ChatGPT — The natural entry point ChatGPT by OpenAI is the most known and most versatile AI. Writing, code, analysis, translation, summary, creativity... it does a bit of everything, often very well. The fre
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I wrapped a backlink API in an MCP server so I could do SEO gap analysis from inside Claude
I do a fair amount of competitor backlink research, and the workflow always annoyed me: open a dashboard, run a query, export a CSV, eyeball it, copy domains into a doc, switch to email. Lots of tab-hopping for what is fundamentally a data-filtering problem an agent should handle. So I wrapped the backlink API I'd been using into an MCP server. Now I stay in Claude Code (or Cursor, Cline, Zed, Windsurf) and just describe the goal. This is the build: the architecture, the four tools, and the one design decision I'm still not sure about. The data source The server runs on the Common Crawl hyperlink webgraph — about 4.4 billion edges across 120 million domains, published quarterly as Parquet. That matters for an MCP tool specifically: the data is open, so there's no scraped-proprietary-index liability in handing it to an agent, and the same query is reproducible by anyone. The HTTP API in front of it ( CrawlGraph ) does the heavy DuckDB work; the MCP server is a thin TypeScript stdio client over it. Keeping the server thin was deliberate — all the query cost, caching, and quota logic lives server-side, so the MCP package stays a ~300-line wrapper that's easy to audit before you hand it your API key. The four tools backlinks → referring domains for a target, with authority scores gap_analysis → domains linking to your competitors but not to you gap_outreach_targets → the composite play (below) releases → list the Common Crawl snapshots backlinks and gap_analysis map 1:1 to API endpoints. gap_analysis is the interesting primitive: submit your domain plus 2-5 competitors, and it returns every domain that links to at least one competitor but not to you, each tagged with a found_on array listing which competitors it links to. The composite tool, and the decision I'm unsure about Most API-wrapper MCP servers are pure 1:1 mappings. I added one opinionated composite tool, gap_outreach_targets , because the raw gap output isn't the thing you actually want — it's the raw materia
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LangGraph Production, RAG Memory Challenges, and AI Agent Patterns
LangGraph Production, RAG Memory Challenges, and AI Agent Patterns Today's Highlights Today's highlights dive into practical LangGraph pipeline construction for agentic AI workflows, reveal critical insights from real-world RAG retrieval failures, and unveil 29 open-source design patterns for building robust AI agents. Building Your First LangGraph Pipeline: A Decision-Maker's Guide (Dev.to Top) Source: https://dev.to/labyrinthanalytics/building-your-first-langgraph-pipeline-a-decision-makers-guide-4e25 This article serves as a comprehensive guide for developers looking to implement their first LangGraph pipeline for agentic AI workflows. LangGraph is highlighted as a leading framework for building complex, stateful multi-actor applications, particularly valued for its production readiness and active maintenance. The guide aims to demystify the initial setup and design choices, providing a structured approach for integrating LangGraph into real-world applications. It addresses the common challenges and decision points faced by teams adopting new AI orchestration frameworks, ensuring a smoother development process. The piece emphasizes the practical considerations for building robust and scalable AI agents. It likely delves into architectural patterns, state management within agentic systems, and how to effectively sequence different AI models or tools into a cohesive workflow. For those focused on production deployment, the guide would cover best practices for reliability, testing, and potential optimizations when scaling AI agents. By offering a "decision-maker's guide," it goes beyond mere syntax, encouraging readers to think critically about the implications of their design choices for long-term maintainability and performance in applied AI contexts. Comment: LangGraph is a critical tool for serious agentic AI development; this guide to building pipelines and making early design decisions is exactly what many developers need to get started right. I Published an A
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The Engineering Manager Is the Most Informed Person in the AI Room
Engineering managers are almost entirely absent from the AI transformation discourse. There's a structural reason for that, and understanding it is the first step to doing something about it. Engineers write on the internet. C-suite decisions make headlines. Engineering managers absorb pressure from above, complexity from below, and produce outcomes that get credited in both directions. The system doesn't reward the EM voice publicly. But the EM position gives you something that's genuinely hard to replicate: accountability for what happens to the team, combined with proximity to all three layers of the problem at once. That's not a consolation prize. It's a specific kind of leverage, if you decide to use it deliberately. You're accountable for what nobody else fully sees Writers go where the audience is or where the authority sits. EMs are neither, which is why the playbooks keep missing them. Executives get advice that assumes frictionless implementation. Engineers get advice that assumes organizational stability. At the team level, neither holds. The EM isn't the only person with this view. A good Staff or Principal Engineer often has comparable exposure — technical depth, some business context, real influence on architecture decisions. In many organizations, the senior IC has more technical credibility than the EM and less organizational noise to cut through. The difference isn't the view. It's the accountability. When something goes wrong at the team level — delivery slips, quality degrades, an engineer burns out, AI adoption produces incidents instead of velocity — the EM is the one who carries it. That asymmetry is uncomfortable. It's also what makes the EM's perspective structurally different from everyone else's. You don't just see the intersection where the playbooks break down. You're responsible for what happens there. The question isn't whether that position is valuable. It is. The question is whether you're using it actively or just absorbing it quietl
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I built PhysioFlow — clinic software for Indian physiotherapists, solo in a week
A physiotherapist asked me a simple question a couple of months ago: "Can you build something to run my whole clinic?" So I did — solo, in about a week. Here's the full 2.5-minute walkthrough 👇 What PhysioFlow does PhysioFlow runs an entire physiotherapy clinic from one screen — built for India (₹, GST, WhatsApp, +91): Dashboard — attendance, collections & pending bookings at a glance Patient files — recharge session packs, track usage, auto-generate GST-ready bills Attendance in seconds with a QR scan Online bookings that convert straight into a patient file Reports — daily ledger, revenue, CSV/PDF export Patient portal — patients see their own sessions & prescriptions The stack Next.js + Supabase + TypeScript — multi-tenant, with row-level security so no clinic's data ever leaks to another. Try it Live now with a 14-day free trial, no card needed → https://physioflow.devfrend.com I'm Amar, a full-stack & AI engineer. I design and build products like this end-to-end. I'm open to work — SaaS builds, MCP servers, LLM apps & automation. Reach me on LinkedIn .
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Before I Would Trust an Agent's Memory, I Would Audit Its Authority
This is a submission for the Hermes Agent Challenge , under the Write About Hermes Agent prompt. I've spent the last week testing AI memory failure modes in a public evaluation harness. That work changed how I read agent memory systems. This is a writing submission, not a build submission. I did not build a Hermes Agent project for this challenge. I am writing from the perspective of someone testing how memory failures show up once agents can act. So when I look at Hermes Agent, the question I care about is not only: Can the agent remember useful things? The harder question is: When memory conflicts, which memory is allowed to govern the agent's action? That distinction matters. Hermes Agent is interesting because it is not just a chat interface. Its documentation describes an open-source agentic system with tool use, project context, persistent memory, skills, browser automation, checkpoints, delegation, scheduled tasks, and multiple memory providers. That is exactly the kind of system where memory stops being a convenience feature and starts becoming part of the agent's operating boundary. If an agent can run tools, edit files, browse, delegate work, schedule tasks, and remember across sessions, then memory is no longer just "context." Memory becomes governance. The Memory Problem I Would Watch For In a simple chatbot, bad memory is annoying. In an agent, bad memory can become operational. The failure mode is not only that the agent forgets something. Sometimes the more dangerous failure is that it remembers the wrong thing too confidently. A memory can be: relevant but stale, relevant but low-authority, relevant but superseded, relevant but only context, relevant but not allowed to determine the action. That is the distinction my own tests kept running into. Retrieval systems are usually good at answering: What memory is closest to the user's request? But safety often depends on a different question: What memory is allowed to decide what the agent should do? Thos
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How I Use Kiro: A Teammate, Not an Autopilot
1. Why I use Kiro I've been using Kiro for almost 1 year now, I'm using it as a Cloud Architect and also to build side projects for fun. The main reason I use Kiro over other tools is how it works with you as an engineer. Over the months, I've noticed certain patterns in how I use Kiro. Let's go over them: Index 1. Why I use Kiro 2. Pair Programming with Kiro 3. Repeatable workflows as Skills 4. Using Plan, Specs and Agents 5. Council of agents 6. Documentation, Documentation, Documentation Final thoughts 2. Pair Programming with Kiro The most common way that I use Kiro is in Pair Programming. Pair Programming is when there are 2 developers working together on the same task, they can work in tandem or one of them can be the one guiding/planning while the other one does the code. In my case, with Kiro, I'm the one doing the guiding and planning while Kiro is the one executing and implementing the code. I'm also using Kiro as my rubber duck. If I have a new idea or I'm working on a blocking bug, I talk to Kiro so it can give me a different point of view, investigate and steer me into good practices. The main reason for me to do it this way is because once the session is over, I can run a prompt/skill to record everything from the session: Kiro, summarize this session and save it into a .memory folder with the format yyyymmdd and as a markdown So then everything that we've done is going to be recorded there. Do you remember everything that you've done yesterday? Maybe. But what about last week? And what about one month ago? I definitely don't remember it. In the classic Software Development Life Cycle, we have tickets, and we have a way that we can recall all this information, but the more detailed context of why you did it is going to be completely missed. Now, with tools like Kiro, this is possible to remember. You just have a .memory folder where you summarize all your sessions. So in the future, we could have a situation like this: Oh, I don't remember what changes
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Erin Brockovich takes aim at data center secrecy
Environmental activist Erin Brockovich has a new mission.
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Building Hermes Financial Agent: An Explainable AI Copilot for EGX Investors
Overview I built Hermes Financial Agent — an AI-powered financial assistant for investors in the Egyptian Exchange (EGX). The goal: not just calculate portfolio value, but explain risks in a transparent, auditable way. Features Real EGX market data via Yahoo Finance Portfolio tracking and valuation Daily financial reports Telegram-user portfolio isolation Cached quote fallback for resilience Explainable risk insights Explainable Risk Intelligence Unlike traditional trackers, Hermes surfaces: Portfolio concentration risk Stale market data exposure Quote coverage percentage Valuation gaps from unavailable data Users understand confidence level behind their valuation — not just the number. Technical Stack Hermes Agent framework Python GitHub Actions (automated smoke testing) Offline-safe quote fallback architecture Repository 🔗 GitHub Repository Future Roadmap News sentiment analysis Investment thesis tracking Market briefing generation Advanced financial reasoning agents hermeschallenge
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Here’s your first look at ‘A Minecraft Movie Squared’ with Kirsten Dunst as Alex
The A Minecraft Movie sequel officially has a title: A Minecraft Movie Squared. What's more, we now know that Kirsten Dunst will star as Alex, the game's female character option, and that Matt Berry is set to play an even bigger role in this film. He voiced Nitwit in the first movie, but in this […]
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I built an n8n MCP Server so Claude can list, run, and monitor my workflows in plain English
I got tired of opening the n8n dashboard every time I needed to check on a workflow. You know the drill: open browser → navigate to executions → find the right workflow → check status → close. Five clicks for something that should be instant. So I built a 9-node n8n workflow that exposes my entire n8n instance to Claude Desktop via the Model Context Protocol (MCP) . Now I just type: "Did my backup automation run successfully last night?" And Claude calls my real n8n API and responds with the execution status. No browser. No clicking. What is MCP? MCP (Model Context Protocol) is an open standard from Anthropic that lets AI assistants connect to external tools and data sources. Instead of just answering questions from training data, Claude can call real APIs, read live data, and take actions. n8n already has an MCP Server Trigger node (available in 1.70+). I used it to expose 4 tools to Claude: Tool What it does list_workflows Returns all active workflows with IDs and names run_workflow Triggers any workflow by ID get_executions Pulls recent execution history with status search_workflows Keyword filter across all workflow names How it works The architecture is simple: Claude Desktop → mcp-remote → n8n MCP Server Trigger → Code nodes → n8n REST API Each of the 4 tools is a Code node that calls the n8n REST API internally using X-N8N-API-KEY authentication. The workflow: MCP Server Trigger — SSE endpoint that Claude connects to list_workflows — GET /api/v1/workflows?active=true run_workflow — POST /api/v1/workflows/{id}/run get_executions — GET /api/v1/executions?workflowId={id}&limit=N search_workflows — keyword filter on workflow names Credentials are stored in n8n Variables ( $vars.N8N_BASE_URL and $vars.N8N_API_KEY ) — never hardcoded. The Claude Desktop config { "mcpServers" : { "n8n" : { "command" : "npx" , "args" : [ "mcp-remote" , "https://your-n8n-instance.com/mcp/your-webhook-id/sse" ] } } } Restart Claude Desktop. Claude now has access to your n8n instance. R
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This weekend’s two biggest movies were both directed by YouTubers
The YouTube-to-prestige-horror pipeline is looking very strong.
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Your MCP servers can read your SSH keys. Anthropic just fixed that.
Every MCP server you run locally executes with your full filesystem and network permissions. That means the GitHub MCP server, the Slack one, that third-party tool you installed from npm last week — all of them can read your SSH keys, .env files, and credential stores by default. Anthropic just open-sourced the fix: sandbox-runtime , the sandboxing layer they built for Claude Code. One-line wrap, no Docker, OS-level enforcement. What actually changed srt (the Sandbox Runtime CLI) enforces filesystem and network restrictions on any process using native OS primitives: macOS : Uses sandbox-exec with dynamically generated Seatbelt profiles Linux : Uses bubblewrap for containerization + network namespace isolation Network filtering : HTTP/HTTPS traffic routes through an HTTP proxy; other TCP goes through SOCKS5 — both enforce your domain allowlists Install it: npm install -g @anthropic-ai/sandbox-runtime Wrap an MCP server in your .mcp.json — change command from npx to srt , move the rest to args : { "mcpServers" : { "filesystem" : { "command" : "srt" , "args" : [ "npx" , "-y" , "@modelcontextprotocol/server-filesystem" ] } } } Then configure what the process is actually allowed to touch in ~/.srt-settings.json : { "filesystem" : { "denyRead" : [ "~/.ssh" ], "allowWrite" : [ "." ], "denyWrite" : [ "~/sensitive-folder" ] }, "network" : { "allowedDomains" : [ "api.github.com" , "*.npmjs.org" ] } } The result: the MCP server can work in your project directory, talk to the domains it needs, and nothing else. Why this matters The threat model is real. An MCP server running compromised code — or simply a server with more ambient access than it needs — can exfiltrate your SSH keys, read your .env files, or phone home to arbitrary hosts. This isn't theoretical; it's the same class of supply-chain risk that exists for any untrusted npm package, except MCP servers are typically long-running processes with broad system access. srt is designed secure-by-default : processes start wit
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Novelty by AI ที่มา Disproved Erdős Planar Unit Distance Problem
AI จะครองโลก เป็นคำที่ได้ยินมานาน เท่าที่ผู้เขียนจำความได้ก็มี Judgement Day ยุคหนัง Terminator แต่หากจะจริงจังขนาดโยงเข้าความเป็นจริงก็ยังไม่มีอะไรชัดเจน แต่วันนี้เรามีหลักฐานพิสูจน์ได้จริงแล้ว ด้วยความ Novelty จาก OpenAI ที่สามารถค้นพบความรู้ใหม่ที่ไม่เคยมีมนุษย์ค้นพบมาก่อน หักล้างความเชื่อที่ว่า AI ทำได้เพียงนำสิ่งที่มนุษย์ค้นพบแล้วมาเรียงต่อกัน ในเดือนพฤษภาคม 2026 reasoning model ภายในของ OpenAI ได้ disprove Erdős Planar Unit Distance Problem ซึ่งเป็นปัญหาและข้อคาดการณ์ทาง Combinatorial geometry ที่ Paul Erdős ตั้งไว้ตั้งแต่ปี 1946 โจทย์ระบุว่า เมื่อวางจุด nn n จุดบนระนาบ จำนวนของคู่จุดที่ห่างกันพอดี 1 หน่วยจะมีได้มากที่สุดเท่าใด Erdős แสดงความเป็นไปได้ผ่านการจัดเรียงแบบ grid ว่าได้จำนวนคู่ที่เติบโตเหนือเส้นตรงเพียงเล็กน้อย และตั้งข้อคาดการณ์ว่าไม่มีโครงสร้างใดทำได้ดีกว่านี้อย่างมีนัยสำคัญ ข้อคาดการณ์นี้ได้รับการยอมรับในวงกว้างตลอด 80 ปีที่ผ่านมา และยังไม่มีข้อคาดการณ์ที่ดีกว่านี้ จนกระทั่ง OpenAI ได้เผยแพร่ Chain of Thought (CoT) เรียบเรียงความยาว 125 หน้า ซึ่งบันทึกลำดับการให้เหตุผลของโมเดลไว้ทั้งกระบวนการว่าโมเดลไปถึงคำตอบอย่างไร กรอบของคำตอบ: lower bound กับ upper bound ก่อนเข้ากระบวนการทำงานของโมเดล ขออธิบาย "กรอบ" ของคำตอบของปัญหานี้ก่อน เพราะคำตอบถูกล้อมไว้ด้วย lower bound จำนวนที่สร้างได้จริงแล้ว อย่างน้อยเท่านี้ และ upper bound เพดานที่พิสูจน์แล้วว่าเกินไม่ได้ ด้าน lower bound นั้น Erdős เอง (1946) ใช้การจัดเรียงแบบ grid แสดงว่าสร้างได้ถึง n1+Ω(1/loglogn)n^{1+\Omega(1/\log\log n)} n 1 + Ω ( 1/ l o g l o g n ) ซึ่งมากกว่าเส้นตรงเพียงเล็กน้อย และเข้าใกล้ศูนย์เมื่อ nn n ใหญ่ขึ้น ส่วนด้าน upper bound นั้น Erdős พิสูจน์เพดานแรกไว้ที่ O(n3/2)O(n^{3/2}) O ( n 3/2 ) จากวงกลมหนึ่งหน่วยสองวงตัดกันได้ไม่เกินสองจุด โดยต่อมา Spencer–Szemerédi–Trotter (1984) บีบเพดานนี้ลงมาเป็น O(n4/3)O(n^{4/3}) O ( n 4/3 ) ซึ่งเป็น upper bound ที่ดีที่สุดจนถึงปัจจุบัน และยังคงอยู่หลังการค้นพบของ OpenAI model วิธีเก่าของ Erdős: วงกลมรัศมีเลือกมาลากผ่านจุด grid หลายจุดพร้อมกัน ทำให้ระยะซ้ำมีมาก สิ่งที่ Erdős คาดการณ์คือ คำตอบจริงของ Planar Unit Distance Problem ควรอยู่ชิดด้าน lower
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‘This is fine’ artist KC Green reaches agreement with AI startup Artisan
The startup has apparently taken down the ads using KC Green's "This is fine" meme.
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Feeble Little Horse leans into digital weirdness on bitknot
From the opening moments of bitknot, it's obvious that Feeble Little Horse has found an entirely new gear. Where on Girl with Fish the blown-out textures were more '90s indie rock and shoegaze, on their latest LP, there's a more modern edge to the distortion and the riffs cut cleaner. Similarly, where the digital glitchiness […]
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Token Budgeting
Token Budgeting: Optimizing Generative AI Costs and Performance Modern generative AI applications offer unprecedented capabilities, yet their operational costs can quickly escalate. The primary driver of these costs, alongside computational resources, is token consumption . Understanding and implementing effective token budgeting strategies is not merely an optimization; it is fundamental to building scalable, efficient, and economically viable AI systems. The Economics of Tokens Tokens are the atomic units of text that large language models (LLMs) process. Whether you're sending a prompt (input tokens) or receiving a response (output tokens), each token incurs a cost. This cost varies by model, but the principle remains: more tokens mean higher expenses and often, increased latency due to longer processing times. Efficient token management directly impacts your application's bottom line and user experience. Strategic Pillars of Token Efficiency Optimizing token usage requires a multi-faceted approach, focusing on both input and output, as well as the underlying model choices. 1. Input Optimization: Crafting Smarter Prompts The most direct way to save tokens is to be judicious with the information sent to the model. Every word in your prompt counts. Concise Prompt Engineering : Avoid verbose instructions or unnecessary conversational filler. Get straight to the point. Instead of: "Hey AI, I was wondering if you could please help me summarize this really long article I have here. It's about quantum computing. Could you make it brief, maybe just a few sentences?" Opt for: "Summarize the following article about quantum computing in three sentences: [Article Text]" This significantly reduces input tokens without sacrificing clarity. Context Window Management : LLMs have a finite context window , the maximum number of tokens they can process at once. Sending an entire document when only a specific section is relevant is wasteful. Employ techniques like: Summarization : P
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Making sense of the debate over AI psychosis
On the latest episode of Equity, we debate whether tech CEOs are "uniquely prone to AI psychosis."
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A .NET Dinosaur in Web3. Day 18 - Automated Market Maker
🏦 Day 6 of 7: Building a Mini Uniswap in 80 Lines of Solidity Imagine a vending machine. It has 1,000 coffee beans and 1,000 coins. No menu, no cashier — just one iron rule: the product of the two numbers inside must never decrease. That's it! This is how Uniswap works — and this is what I built on Day 6, coming from .NET. Here's how, why it's elegant, and where you can step on a rake. Why an Order Book Doesn't Work on a Blockchain Traditional exchanges — Binance, NYSE, any CEX — run on an order book . Market makers post bids and asks. A matching engine pairs them. Millions of updates per second, all in a centralised database. In a blockchain, this is impossible. Transactions take 12 seconds. Every state change costs gas. Storing millions of constantly changing orders would eat all the profit before a single trade completes. Uniswap's solution: replace the order book with a liquidity pool — a smart contract holding two tokens — and replace the matching engine with pure math. Just a formula — below. x · y = k — The Formula That Broke Finance The Constant Product Invariant : x · y = k Where x is the reserve of Token0, y is the reserve of Token1, and k is a constant that must never decrease during swaps. When a trader sells Token0 into the pool, x increases. To keep k constant, y must decrease — the contract sends out Token1. The price is determined automatically by the ratio of reserves. Live example with numbers: Pool: 1,000 Token0, 1,000 Token1. k = 1,000,000. Trader sells 100 Token0: amountOut = (reserveOut × amountIn) / (reserveIn + amountIn) amountOut = (1000 × 100) / (1000 + 100) amountOut = 100,000 / 1,100 amountOut ≈ 90.9 Token1 The trader gets ~90.9, not 100. That gap is slippage — and it's not a bug. It's the formula protecting the pool. The more you buy relative to pool size, the worse your price gets. Naturally. Mathematically. After the swap: pool has 1,100 Token0 and ~909.1 Token1. k ≈ 1,000,000. Invariant holds. The Contract: SimpleAMM Three functions.