DTOC: Dynamic Tool Output Compression for Adaptive Context Management in AI Agents
As agent capabilities have grown, practical limitations increasingly stem from constrained context windows rather than model capacity. Common strategies, such as truncation, heuristic aging, and lossy summarization, may discard useful information or introduce hallucination risk. To address these challenges, we propose Dynamic Tool Output Compression (DTOC), a framework for scalable context management in LLM-based agents that models context updates as explicit and reversible operations within the agent reasoning loop. DTOC retains full tool outputs in external memory while inserting compact placeholders into the active context, enabling selective reconstruction when needed. We formalize th...
| Authors | Abhay Chaturvedi, Shreya Bhattacharya, Rashmika Gopalkrishnan et al. |
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| Primary category | cs.AI |
| Published | 6 August 2026 |
| Last updated at source | 6 August 2026 |
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