
headroom
The Context Optimization Layer for LLM Applications
The Lens
By Erik Loyd, SaaS CEO and former COO/CFO of an AWS Premier Partner.
Updated Jul 2026
headroom strips the bloat out of everything an LLM agent reads before it hits the prompt, tool outputs, logs, RAG chunks, raw file dumps, conversation history. The reported cuts are large, 60 to 95 percent fewer tokens with the same answers, and the compression is reversible, so the original is cached and fetchable when the model actually needs it. Apache-2.0, local-first, and free: your content never leaves your machine.
You can adopt it at whatever depth you want. Drop the Python or TypeScript SDK inline, run it as a zero-code local proxy, or wrap an agent directly, Claude Code, Cursor, Copilot, and Aider all supported, plus an MCP server. It also trims the model's output, not just its input, through verbosity steering and effort routing, and headroom learn mines your failed sessions for auto-corrections. Development is fast-moving, this is not a stale side project.
For anyone running agents on metered tokens, the math is simple: less context in and out means a smaller bill, and the local proxy makes trying it nearly free of effort. Solo developers and small teams: the open Apache-2.0 build is the whole tool, use it. Larger teams wanting shared deployment get a managed enterprise offering on top, which is where the money is, cross-team memory and central management rather than a better compressor.
The catch is trust in the compression. Cutting 90 percent of the tokens only works if the 10 percent kept is the right 10 percent, and reversible caching exists precisely because sometimes it is not. Watch the first few runs on real work before you wire it into production blind.
Free vs Self-Hosted vs Paid
open coreFree (open source, Apache-2.0): The full compressor, local-first. SDK, proxy, agent wrapping (Claude Code, Cursor, Copilot, Aider), MCP server, reversible compression, output shaping, and headroom learn. Your data stays local.
Self-hosted: It is local by default, nothing leaves your machine.
Paid (managed enterprise): A hosted and managed offering for team deployments, adding shared cross-agent memory and central management. Priced for organizations.
The open Apache-2.0 build is the complete tool and free; pay only for managed team deployment and shared memory.
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License: Apache License 2.0
Use freely. Patent grant included.
Commercial use: ✓ Yes
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