Entropy Gate: Entropy Quenching for Near-Lossless Token Compression in LLM Pipelines

LLM pipelines waste substantial token budgets on low-information content: repeated context, verbose responses, and redundant boilerplate. We introduce Entropy Gate, a token compression framework applying entropy quenching $-$ a thermodynamic process that progressively freezes out low-energy tokens while preserving semantic fidelity. Each token receives a multi-factor information energy $E(t)$ combining statistical, structural, and positional components. An adaptive quenching schedule $T(\tau) = T_0 / (1 + \alpha \tau)$ removes tokens whose Boltzmann survival probability $p_i = \exp(-E_i / kT)$ falls below threshold, with a fidelity gate halting compression when energy-weighted similarity drops below $\theta$. We prove token selection by descending $E(t)$ maximizes expected semantic preservation, that quenching produces nested survival sets, and that achievable compression approaches the information-theoretic limit $\text{CR} \to 1 - I(P; T)/H(P)$. A Phase 1 heuristic achieves 40-60% compression across five prompt categories while maintaining $S_E > 0.80$, with energy-squared amplification $E \to E^2$ adding 10-25 percentage points. Context deduplication adds 50-70% savings on repeated blocks. Output-side quenching, motivated by findings that brevity improves accuracy, further reduces response overhead. Combined with external memory, reduction composes multiplicatively to 88-96% for agentic workloads. The framework is stateless, model-agnostic, and deploys as an OpenAI-compatible HTTP proxy.