diff --git a/docs/CONTEXT_PROJECTION.md b/docs/CONTEXT_PROJECTION.md
new file mode 100644
index 0000000..73a61b3
--- /dev/null
+++ b/docs/CONTEXT_PROJECTION.md
@@ -0,0 +1,180 @@
+# Context projection in ostk-cache
+
+This document maps how an incoming `/v1/messages` request body is
+**projected** into the cache-friendly form forwarded upstream. The
+projection is the heart of the `rebuild` / `rebuild-kernel` modes: it
+replaces the entire prior-turn history with a synthesized markdown
+**kernel projection** so the unchanging part of the request stays
+byte-stable across turns and hits Anthropic's prompt cache.
+
+## End-to-end flow
+
+```mermaid
+flowchart TD
+    subgraph Client["Agent surface (Claude Code / Codex / Cursor / ...)"]
+        REQ["POST /v1/messages<br/>system + tools + messages[]"]
+    end
+
+    REQ -->|ANTHROPIC_BASE_URL| HANDLER["handle_anthropic_message<br/>(main.rs)"]
+
+    HANDLER --> MODE{mode}
+
+    MODE -- passthrough --> FWD
+    MODE -- mutate --> LEGACY["HUD prepend + collapse system<br/>strip user cache_control"]
+    LEGACY --> FWD
+
+    MODE -- rebuild_kernel --> KFETCH["kernel_client::fetch_projection_with<br/>(.ostk/ostk.sock UDS, timeout)"]
+    KFETCH -- ok --> SETENV["live_envelope_override = envelope"]
+    KFETCH -- "timeout / socket missing / parse err" --> DEMOTE["demote to rebuild_local<br/>(graceful fallback)"]
+    SETENV --> REBUILD
+    DEMOTE --> REBUILD
+    MODE -- rebuild_local --> REBUILD
+
+    subgraph Projection["Projection assembly (rebuild.rs)"]
+        REBUILD["apply_rebuild(req, config)"]
+        REBUILD --> BOUND["find_cycle_boundary_idx<br/>= last real user message"]
+        BOUND --> SPLIT["split messages[]<br/>dropped = [0..idx]<br/>in_flight = [idx..]"]
+
+        SPLIT --> EXTRACT
+        SPLIT --> KEEP["preserve in-flight chain<br/>(user + assistant tool_use<br/>+ tool_result + ... → end_turn)"]
+
+        subgraph EXTRACT["Mine dropped slice"]
+            E1["extract_latest_envelope<br/>(scans tool_result text for<br/>[procs]/[loadavg]/[meminfo]/[ctx])"]
+            E2["summarize_native_tools<br/>last N tool_use signatures"]
+            E3["extract_user_intent_thread<br/>last M prior user msgs"]
+        end
+
+        E1 --> ENV
+        ENV{"envelope source"}
+        SETENV -.live override wins.-> ENV
+        ENV -->|kernel envelope| COMPOSE
+        ENV -->|extracted| COMPOSE
+        ENV -->|neither| ZERO["zeroed placeholder envelope"]
+        ZERO --> COMPOSE
+
+        OPT1["transcript_tail_summary<br/>(transcript_tail.rs:<br/>~/.claude/projects/&lt;hash&gt;/*.jsonl)"]
+        OPT2["recent_assistant_digests<br/>(cycle_digest.rs:<br/>~/.ostk-cache/state/&lt;hash&gt;/cycle_digests.jsonl)"]
+
+        E2 --> COMPOSE["compose_synthetic_context<br/>→ markdown string"]
+        E3 --> COMPOSE
+        OPT1 --> COMPOSE
+        OPT2 --> COMPOSE
+
+        COMPOSE --> ASSEMBLE["new messages[] =<br/>[ {role:user, text: &lt;synthetic&gt;} ]<br/>++ in_flight"]
+        KEEP --> ASSEMBLE
+        ASSEMBLE --> ORPHAN["repair_orphaned_tool_results<br/>(strip tool_result blocks<br/>whose paired tool_use was dropped)"]
+    end
+
+    ORPHAN --> ORIENT["append_kernel_orientation_to_system<br/>(rebuild.rs:62)<br/>discipline block + cache_control ttl=1h"]
+
+    ORIENT --> REWRITE["rewrite_middleware::apply_rewrite<br/>inline content → file_id refs<br/>(SHA-256 match in .ostk/file_cache.jsonl)"]
+
+    REWRITE --> SOFTCAP
+
+    subgraph SOFTCAP["enforce_soft_cap (rebuild.rs:394)"]
+        direction TB
+        TA["Tier A — eject tool_result content &gt;100 KiB"]
+        TB["Tier B — prune oldest in-flight tool_use/result pairs"]
+        TC["Tier C — drop unreferenced tool defs"]
+        TD["Tier D — irreducible → HTTP 413"]
+        TA --> TB --> TC --> TD
+    end
+
+    SOFTCAP -- under cap --> FWD["forward upstream<br/>reqwest → api.anthropic.com"]
+    SOFTCAP -- "Tier D" --> R413["413 reduction payload"]
+
+    FWD --> UP["Anthropic /v1/messages"]
+    UP --> STREAM["SSE / JSON response<br/>streamed back via async-stream"]
+    STREAM --> CLIENT2["agent surface"]
+    STREAM --> HARVEST["harvest &lt;turn-digest&gt;{...}&lt;/turn-digest&gt;<br/>fence from assistant reply"]
+    HARVEST --> PERSIST["append to cycle_digests.jsonl<br/>(feeds next turn's projection)"]
+    STREAM --> LEDGER["AmpRow → .ostk/memory/ledger.jsonl<br/>tagged with mode"]
+```
+
+## Layered byte-stability strategy
+
+```mermaid
+flowchart LR
+    subgraph Outgoing["Final request body (post-projection)"]
+        direction TB
+        SYS["system[]<br/>━━━━━━━━━━━━<br/>original system<br/>+ kernel orientation<br/>(byte-stable, cache_control ttl=1h)"]
+        TOOLS["tools[]<br/>━━━━━━━━━━━━<br/>tool defs (filtered by Tier C)"]
+        SYNTH["messages[0]<br/>━━━━━━━━━━━━<br/>{role:user, text: kernel projection}<br/>━━━━━━━━━━━━<br/># Kernel projection — current cycle state<br/>## Live state envelope<br/>## Recent tool activity<br/>## Prior user intent thread<br/>(recent assistant digests)<br/>(transcript tail)<br/>## Current cycle"]
+        INFLIGHT["messages[1..]<br/>━━━━━━━━━━━━<br/>real user msg<br/>+ in-flight tool_use/result chain"]
+    end
+
+    SYS -.->|"1h cache hit"| HIT1[("Anthropic<br/>prompt cache")]
+    TOOLS -.->|"5m cache hit"| HIT1
+    SYNTH -.->|"dynamic, no marker"| MISS[("recomputed<br/>per turn")]
+    INFLIGHT -.->|"dynamic"| MISS
+```
+
+The orientation block in the system tier is **firmware-class** —
+byte-identical across every turn — so it carries the 1h cache breakpoint.
+The synthetic projection itself is intentionally **not** cache-marked: its
+envelope, tool list, and digests shift every turn, and Anthropic caps
+`cache_control` markers at 4 per request, so the marker was better spent
+on system.
+
+## Mode divergence
+
+```mermaid
+flowchart TD
+    M{"--mode"}
+    M -->|passthrough| P["byte-identical forward<br/>(control baseline)"]
+    M -->|mutate (default)| MU["legacy: HUD prepend +<br/>1h system cache +<br/>strip user cache_control"]
+    M -->|rebuild| RL["rebuild_local<br/>envelope from tool_result text"]
+    M -->|rebuild-kernel| RK["rebuild_kernel<br/>envelope from .ostk/ostk.sock"]
+    RK -.->|kernel unreachable| RL
+    RL --> COMMON["+ optional transcript tail<br/>+ recent assistant digests<br/>+ orientation in system<br/>+ rewrite + soft-cap"]
+    RK --> COMMON
+```
+
+## Per-turn feedback loop
+
+```mermaid
+sequenceDiagram
+    participant A as Agent surface
+    participant P as ostk-cache proxy
+    participant K as ostk kernel<br/>(.ostk/ostk.sock)
+    participant U as api.anthropic.com
+    participant L as cycle_digests.jsonl<br/>+ ledger.jsonl
+
+    A->>P: POST /v1/messages (full history)
+    opt rebuild_kernel
+        P->>K: fetch_projection (IPC)
+        K-->>P: live envelope (or timeout)
+    end
+    P->>P: find cycle boundary
+    P->>P: extract envelope / tools / intent
+    P->>L: read recent digests
+    P->>P: compose synthetic projection
+    P->>P: append orientation to system
+    P->>P: rewrite + soft-cap
+    P->>U: rewritten /v1/messages
+    U-->>P: SSE stream
+    P-->>A: SSE stream (verbatim)
+    P->>P: harvest <turn-digest> fence
+    P->>L: append cycle digest + AmpRow
+    Note over L: feeds next turn's projection
+```
+
+## Key code locations
+
+| Concern | File:Function |
+| --- | --- |
+| HTTP entrypoint, mode dispatch | `src/main.rs::handle_anthropic_message` |
+| Kernel IPC, fallback to local | `src/kernel_client.rs::fetch_projection_with` |
+| Projection assembly | `src/rebuild.rs::apply_rebuild` (rebuild.rs:238) |
+| Cycle boundary detection | `src/rebuild.rs::find_cycle_boundary_idx` (rebuild.rs:746) |
+| Envelope extraction | `src/rebuild.rs::extract_latest_envelope` (rebuild.rs:781) |
+| Tool summary | `src/rebuild.rs::summarize_native_tools` (rebuild.rs:887) |
+| User intent thread | `src/rebuild.rs::extract_user_intent_thread` (rebuild.rs:997) |
+| Final markdown composition | `src/rebuild.rs::compose_synthetic_context` (rebuild.rs:1156) |
+| Orphan tool_result repair | `src/rebuild.rs::repair_orphaned_tool_results` (rebuild.rs:672) |
+| Kernel orientation block | `src/rebuild.rs::append_kernel_orientation_to_system` (rebuild.rs:62) |
+| File-handle rewrite | `src/rewrite_middleware.rs::apply_rewrite` |
+| Soft-cap reduction (Tiers A–D) | `src/rebuild.rs::enforce_soft_cap` (rebuild.rs:394) |
+| Transcript tail ingest | `src/transcript_tail.rs` |
+| Turn-digest harvest + replay | `src/cycle_digest.rs` |
+| Mode / option resolution | `src/config.rs` |