Prefix Caching
Reusing the computed key-value cache for a shared prompt prefix across requests so repeated system prompts and tools are cheaper and faster.
Plain English
The model remembers the expensive front of the prompt so you do not pay to reread it every time.
Example
A coding agent keeps a large system prompt and tool schema cached while only new user turns are billed at full rate.
Why it matters
Agent loops repeat huge prefixes; prefix caching is often the difference between affordable and ruinous token spend.