smart context v3 (#1022)

<!-- This is an auto-generated description by cubic. -->

## Summary by cubic
Adds Smart Context v3 with selectable modes (Off, Conservative,
Balanced) and surfaces token savings in chat. Also improves token
estimation by counting per-file tokens when Smart Context is enabled.

- **New Features**
- Smart Context selector in Pro settings with three options.
Conservative is the default when enabled without an explicit choice.
- New setting: proSmartContextOption ("balanced"); undefined implies
Conservative.
- Engine now receives enable_smart_files_context and smart_context_mode.
- Chat shows a DyadTokenSavings card when the message contains
token-savings?original-tokens=...&smart-context-tokens=..., with percent
saved and a tooltip for exact tokens.
- Token estimation uses extracted file contents for accuracy when Pro +
Smart Context is on; otherwise falls back to formatted codebase output.

<!-- End of auto-generated description by cubic. -->

e2e-tests/context_manage.spec.ts

@@ -41,7 +41,7 @@ test("manage context - smart context", async ({ po }) => {
   // Disabling smart context will automatically disable
   // the auto-includes.
   const proModesDialog = await po.openProModesDialog();
-  await proModesDialog.toggleSmartContext();
+  await proModesDialog.setSmartContextMode("off");
   await proModesDialog.close();
 
   await po.sendPrompt("[dump]");

e2e-tests/engine.spec.ts

@@ -2,8 +2,6 @@ import { testSkipIfWindows } from "./helpers/test_helper";
 
 testSkipIfWindows("send message to engine", async ({ po }) => {
   await po.setUpDyadPro();
-  // By default, it's using auto which points to Flash 2.5 and doesn't
-  // use engine.
   await po.selectModel({ provider: "Google", model: "Gemini 2.5 Pro" });
   await po.sendPrompt("[dump] tc=turbo-edits");
 
@@ -11,6 +9,23 @@ testSkipIfWindows("send message to engine", async ({ po }) => {
   await po.snapshotMessages({ replaceDumpPath: true });
 });
 
+testSkipIfWindows(
+  "send message to engine - smart context balanced",
+  async ({ po }) => {
+    await po.setUpDyadPro();
+    const proModesDialog = await po.openProModesDialog({
+      location: "home-chat-input-container",
+    });
+    await proModesDialog.setSmartContextMode("balanced");
+    await proModesDialog.close();
+    await po.selectModel({ provider: "Google", model: "Gemini 2.5 Pro" });
+    await po.sendPrompt("[dump] tc=turbo-edits");
+
+    await po.snapshotServerDump("request");
+    await po.snapshotMessages({ replaceDumpPath: true });
+  },
+);
+
 testSkipIfWindows("send message to engine - openai gpt-4.1", async ({ po }) => {
   await po.setUpDyadPro();
   // By default, it's using auto which points to Flash 2.5 and doesn't
@@ -52,7 +67,7 @@ testSkipIfWindows(
     const proModesDialog = await po.openProModesDialog({
       location: "home-chat-input-container",
     });
-    await proModesDialog.toggleSmartContext();
+    await proModesDialog.setSmartContextMode("off");
     await proModesDialog.close();
     await po.sendPrompt("[dump] tc=turbo-edits");
 

e2e-tests/gateway.spec.ts

@@ -7,7 +7,7 @@ testSkipIfWindows("claude 4 sonnet", async ({ po }) => {
     location: "home-chat-input-container",
   });
   await proModesDialog.toggleTurboEdits();
-  await proModesDialog.toggleSmartContext();
+  await proModesDialog.setSmartContextMode("off");
   await proModesDialog.close();
 
   await po.selectModel({ provider: "Anthropic", model: "Claude 4 Sonnet" });

e2e-tests/helpers/test_helper.ts

@@ -67,8 +67,12 @@ class ProModesDialog {
     public close: () => Promise<void>,
   ) {}
 
-  async toggleSmartContext() {
-    await this.page.getByRole("switch", { name: "Smart Context" }).click();
+  async setSmartContextMode(mode: "balanced" | "off" | "conservative") {
+    await this.page
+      .getByRole("button", {
+        name: mode.charAt(0).toUpperCase() + mode.slice(1),
+      })
+      .click();
   }
 
   async toggleTurboEdits() {

e2e-tests/smart_context_options.spec.ts

@@ -0,0 +1,15 @@
+import { test } from "./helpers/test_helper";
+
+test("switching smart context mode saves the right setting", async ({ po }) => {
+  await po.setUpDyadPro();
+  const proModesDialog = await po.openProModesDialog({
+    location: "home-chat-input-container",
+  });
+  await po.snapshotSettings();
+  await proModesDialog.setSmartContextMode("balanced");
+  await po.snapshotSettings();
+  await proModesDialog.setSmartContextMode("off");
+  await po.snapshotSettings();
+  await proModesDialog.setSmartContextMode("conservative");
+  await po.snapshotSettings();
+});

e2e-tests/snapshots/engine.spec.ts_send-message-to-engine---smart-context-balanced-1.aria.yml

@@ -0,0 +1,6 @@
+- paragraph: "[dump] tc=turbo-edits"
+- paragraph: "[[dyad-dump-path=*]]"
+- img
+- text: less than a minute ago
+- button "Retry":
+  - img

e2e-tests/snapshots/smart_context_options.spec.ts_switching-smart-context-mode-saves-the-right-setting-1.txt

@@ -0,0 +1,28 @@
+{
+  "selectedModel": {
+    "name": "auto",
+    "provider": "auto"
+  },
+  "providerSettings": {
+    "auto": {
+      "apiKey": {
+        "value": "testdyadkey",
+        "encryptionType": "plaintext"
+      }
+    }
+  },
+  "telemetryConsent": "unset",
+  "telemetryUserId": "[UUID]",
+  "hasRunBefore": true,
+  "enableDyadPro": true,
+  "experiments": {},
+  "lastShownReleaseNotesVersion": "[scrubbed]",
+  "enableProLazyEditsMode": true,
+  "enableProSmartFilesContextMode": true,
+  "selectedTemplateId": "react",
+  "selectedChatMode": "build",
+  "enableAutoFixProblems": false,
+  "enableAutoUpdate": true,
+  "releaseChannel": "stable",
+  "isTestMode": true
+}

e2e-tests/snapshots/smart_context_options.spec.ts_switching-smart-context-mode-saves-the-right-setting-2.txt

@@ -0,0 +1,29 @@
+{
+  "selectedModel": {
+    "name": "auto",
+    "provider": "auto"
+  },
+  "providerSettings": {
+    "auto": {
+      "apiKey": {
+        "value": "testdyadkey",
+        "encryptionType": "plaintext"
+      }
+    }
+  },
+  "telemetryConsent": "unset",
+  "telemetryUserId": "[UUID]",
+  "hasRunBefore": true,
+  "enableDyadPro": true,
+  "experiments": {},
+  "lastShownReleaseNotesVersion": "[scrubbed]",
+  "enableProLazyEditsMode": true,
+  "enableProSmartFilesContextMode": true,
+  "proSmartContextOption": "balanced",
+  "selectedTemplateId": "react",
+  "selectedChatMode": "build",
+  "enableAutoFixProblems": false,
+  "enableAutoUpdate": true,
+  "releaseChannel": "stable",
+  "isTestMode": true
+}

e2e-tests/snapshots/smart_context_options.spec.ts_switching-smart-context-mode-saves-the-right-setting-3.txt

@@ -0,0 +1,28 @@
+{
+  "selectedModel": {
+    "name": "auto",
+    "provider": "auto"
+  },
+  "providerSettings": {
+    "auto": {
+      "apiKey": {
+        "value": "testdyadkey",
+        "encryptionType": "plaintext"
+      }
+    }
+  },
+  "telemetryConsent": "unset",
+  "telemetryUserId": "[UUID]",
+  "hasRunBefore": true,
+  "enableDyadPro": true,
+  "experiments": {},
+  "lastShownReleaseNotesVersion": "[scrubbed]",
+  "enableProLazyEditsMode": true,
+  "enableProSmartFilesContextMode": false,
+  "selectedTemplateId": "react",
+  "selectedChatMode": "build",
+  "enableAutoFixProblems": false,
+  "enableAutoUpdate": true,
+  "releaseChannel": "stable",
+  "isTestMode": true
+}

e2e-tests/snapshots/smart_context_options.spec.ts_switching-smart-context-mode-saves-the-right-setting-4.txt

@@ -0,0 +1,28 @@
+{
+  "selectedModel": {
+    "name": "auto",
+    "provider": "auto"
+  },
+  "providerSettings": {
+    "auto": {
+      "apiKey": {
+        "value": "testdyadkey",
+        "encryptionType": "plaintext"
+      }
+    }
+  },
+  "telemetryConsent": "unset",
+  "telemetryUserId": "[UUID]",
+  "hasRunBefore": true,
+  "enableDyadPro": true,
+  "experiments": {},
+  "lastShownReleaseNotesVersion": "[scrubbed]",
+  "enableProLazyEditsMode": true,
+  "enableProSmartFilesContextMode": true,
+  "selectedTemplateId": "react",
+  "selectedChatMode": "build",
+  "enableAutoFixProblems": false,
+  "enableAutoUpdate": true,
+  "releaseChannel": "stable",
+  "isTestMode": true
+}

src/components/ProModeSelector.tsx

@@ -14,7 +14,7 @@ import { Label } from "@/components/ui/label";
 import { Sparkles, Info } from "lucide-react";
 import { useSettings } from "@/hooks/useSettings";
 import { IpcClient } from "@/ipc/ipc_client";
-import { hasDyadProKey } from "@/lib/schemas";
+import { hasDyadProKey, type UserSettings } from "@/lib/schemas";
 
 export function ProModeSelector() {
   const { settings, updateSettings } = useSettings();
@@ -25,10 +25,25 @@ export function ProModeSelector() {
     });
   };
 
-  const toggleSmartContext = () => {
+  const handleSmartContextChange = (
+    newValue: "off" | "conservative" | "balanced",
+  ) => {
+    if (newValue === "off") {
       updateSettings({
-      enableProSmartFilesContextMode: !settings?.enableProSmartFilesContextMode,
+        enableProSmartFilesContextMode: false,
+        proSmartContextOption: undefined,
       });
+    } else if (newValue === "conservative") {
+      updateSettings({
+        enableProSmartFilesContextMode: true,
+        proSmartContextOption: undefined, // Conservative is the default when enabled but no option set
+      });
+    } else if (newValue === "balanced") {
+      updateSettings({
+        enableProSmartFilesContextMode: true,
+        proSmartContextOption: "balanced",
+      });
+    }
   };
 
   const toggleProEnabled = () => {
@@ -99,14 +114,10 @@ export function ProModeSelector() {
               settingEnabled={Boolean(settings?.enableProLazyEditsMode)}
               toggle={toggleLazyEdits}
             />
-            <SelectorRow
-              id="smart-context"
-              label="Smart Context"
-              description="Optimizes your AI's code context"
-              tooltip="Improve efficiency and save credits working on large codebases."
+            <SmartContextSelector
               isTogglable={proModeTogglable}
-              settingEnabled={Boolean(settings?.enableProSmartFilesContextMode)}
-              toggle={toggleSmartContext}
+              settings={settings}
+              onValueChange={handleSmartContextChange}
             />
           </div>
         </div>
@@ -168,3 +179,83 @@ function SelectorRow({
     </div>
   );
 }
+
+function SmartContextSelector({
+  isTogglable,
+  settings,
+  onValueChange,
+}: {
+  isTogglable: boolean;
+  settings: UserSettings | null;
+  onValueChange: (value: "off" | "conservative" | "balanced") => void;
+}) {
+  // Determine current value based on settings
+  const getCurrentValue = (): "off" | "conservative" | "balanced" => {
+    if (!settings?.enableProSmartFilesContextMode) {
+      return "off";
+    }
+    if (settings?.proSmartContextOption === "balanced") {
+      return "balanced";
+    }
+    // If enabled but no option set (undefined/falsey), it's conservative
+    return "conservative";
+  };
+
+  const currentValue = getCurrentValue();
+
+  return (
+    <div className="space-y-3">
+      <div className="space-y-1.5">
+        <Label className={!isTogglable ? "text-muted-foreground/50" : ""}>
+          Smart Context
+        </Label>
+        <div className="flex items-center gap-1">
+          <Tooltip>
+            <TooltipTrigger asChild>
+              <Info
+                className={`h-4 w-4 cursor-help ${!isTogglable ? "text-muted-foreground/50" : "text-muted-foreground"}`}
+              />
+            </TooltipTrigger>
+            <TooltipContent side="right" className="max-w-72">
+              Improve efficiency and save credits working on large codebases.
+            </TooltipContent>
+          </Tooltip>
+          <p
+            className={`text-xs ${!isTogglable ? "text-muted-foreground/50" : "text-muted-foreground"}`}
+          >
+            Optimizes your AI's code context
+          </p>
+        </div>
+      </div>
+      <div className="inline-flex rounded-md border border-input">
+        <Button
+          variant={currentValue === "off" ? "default" : "ghost"}
+          size="sm"
+          onClick={() => onValueChange("off")}
+          disabled={!isTogglable}
+          className="rounded-r-none border-r border-input h-8 px-3 text-xs flex-shrink-0"
+        >
+          Off
+        </Button>
+        <Button
+          variant={currentValue === "conservative" ? "default" : "ghost"}
+          size="sm"
+          onClick={() => onValueChange("conservative")}
+          disabled={!isTogglable}
+          className="rounded-none border-r border-input h-8 px-3 text-xs flex-shrink-0"
+        >
+          Conservative
+        </Button>
+        <Button
+          variant={currentValue === "balanced" ? "default" : "ghost"}
+          size="sm"
+          onClick={() => onValueChange("balanced")}
+          disabled={!isTogglable}
+          className="rounded-l-none h-8 px-3 text-xs flex-shrink-0"
+        >
+          Balanced
+        </Button>
+      </div>
+    </div>
+  );
+}

src/components/chat/DyadThink.tsx

@@ -2,6 +2,7 @@ import React, { useState, useEffect } from "react";
 import { Brain, ChevronDown, ChevronUp, Loader } from "lucide-react";
 import { VanillaMarkdownParser } from "./DyadMarkdownParser";
 import { CustomTagState } from "./stateTypes";
+import { DyadTokenSavings } from "./DyadTokenSavings";
 
 interface DyadThinkProps {
   node?: any;
@@ -13,6 +14,26 @@ export const DyadThink: React.FC<DyadThinkProps> = ({ children, node }) => {
   const inProgress = state === "pending";
   const [isExpanded, setIsExpanded] = useState(inProgress);
 
+  // Check if content matches token savings format
+  const tokenSavingsMatch =
+    typeof children === "string"
+      ? children.match(
+          /^dyad-token-savings\?original-tokens=([0-9.]+)&smart-context-tokens=([0-9.]+)$/,
+        )
+      : null;
+
+  // If it's token savings format, render DyadTokenSavings component
+  if (tokenSavingsMatch) {
+    const originalTokens = parseFloat(tokenSavingsMatch[1]);
+    const smartContextTokens = parseFloat(tokenSavingsMatch[2]);
+    return (
+      <DyadTokenSavings
+        originalTokens={originalTokens}
+        smartContextTokens={smartContextTokens}
+      />
+    );
+  }
+
   // Collapse when transitioning from in-progress to not-in-progress
   useEffect(() => {
     if (!inProgress && isExpanded) {

src/components/chat/DyadTokenSavings.tsx

@@ -0,0 +1,36 @@
+import React from "react";
+import { Zap } from "lucide-react";
+import { Tooltip, TooltipTrigger, TooltipContent } from "../ui/tooltip";
+
+interface DyadTokenSavingsProps {
+  originalTokens: number;
+  smartContextTokens: number;
+}
+
+export const DyadTokenSavings: React.FC<DyadTokenSavingsProps> = ({
+  originalTokens,
+  smartContextTokens,
+}) => {
+  const tokensSaved = originalTokens - smartContextTokens;
+  const percentageSaved = Math.round((tokensSaved / originalTokens) * 100);
+
+  return (
+    <Tooltip>
+      <TooltipTrigger asChild>
+        <div className="bg-green-50 dark:bg-green-950 hover:bg-green-100 dark:hover:bg-green-900 rounded-lg px-4 py-2 border border-green-200 dark:border-green-800 my-2 cursor-pointer">
+          <div className="flex items-center gap-2 text-green-700 dark:text-green-300">
+            <Zap size={16} className="text-green-600 dark:text-green-400" />
+            <span className="text-xs font-medium">
+              Saved {percentageSaved}% of codebase tokens with Smart Context
+            </span>
+          </div>
+        </div>
+      </TooltipTrigger>
+      <TooltipContent side="top" align="center">
+        <div className="text-left">
+          Saved {Math.round(tokensSaved).toLocaleString()} tokens
+        </div>
+      </TooltipContent>
+    </Tooltip>
+  );
+};

src/ipc/handlers/token_count_handlers.ts

@@ -86,13 +86,23 @@ export function registerTokenCountHandlers() {
 
       if (chat.app) {
         const appPath = getDyadAppPath(chat.app.path);
-        codebaseInfo = (
-          await extractCodebase({
+        const { formattedOutput, files } = await extractCodebase({
           appPath,
           chatContext: validateChatContext(chat.app.chatContext),
-          })
-        ).formattedOutput;
+        });
+        codebaseInfo = formattedOutput;
+        if (settings.enableDyadPro && settings.enableProSmartFilesContextMode) {
+          codebaseTokens = estimateTokens(
+            files
+              // It doesn't need to be the exact format but it's just to get a token estimate
+              .map(
+                (file) => `<dyad-file=${file.path}>${file.content}</dyad-file>`,
+              )
+              .join("\n\n"),
+          );
+        } else {
           codebaseTokens = estimateTokens(codebaseInfo);
+        }
         logger.log(
           `Extracted codebase information from ${appPath}, tokens: ${codebaseTokens}`,
         );

src/ipc/utils/get_model_client.ts

@@ -84,6 +84,7 @@ export async function getModelClient(
                   ? false
                   : settings.enableProLazyEditsMode,
               enableSmartFilesContext: settings.enableProSmartFilesContextMode,
+              smartContextMode: settings.proSmartContextOption,
             },
             settings,
           })

src/ipc/utils/llm_engine_provider.ts

@@ -44,6 +44,7 @@ or to provide a custom fetch implementation for e.g. testing.
   dyadOptions: {
     enableLazyEdits?: boolean;
     enableSmartFilesContext?: boolean;
+    smartContextMode?: "balanced";
   };
   settings: UserSettings;
 }
@@ -149,6 +150,7 @@ export function createDyadEngine(
               enable_lazy_edits: options.dyadOptions.enableLazyEdits,
               enable_smart_files_context:
                 options.dyadOptions.enableSmartFilesContext,
+              smart_context_mode: options.dyadOptions.smartContextMode,
             };
           }
 

src/lib/schemas.ts

@@ -160,6 +160,7 @@ export const UserSettingsSchema = z.object({
   thinkingBudget: z.enum(["low", "medium", "high"]).optional(),
   enableProLazyEditsMode: z.boolean().optional(),
   enableProSmartFilesContextMode: z.boolean().optional(),
+  proSmartContextOption: z.enum(["balanced"]).optional(),
   selectedTemplateId: z.string(),
   enableSupabaseWriteSqlMigration: z.boolean().optional(),
   selectedChatMode: ChatModeSchema.optional(),