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How LLMs Learn to Be Helpful (RLHF vs DPO) How Microsoft Ships AI Agents at Enterprise Scale EP221: How Docker Works Under the Hood LAST CALL FOR ENROLLMENT: Become an AI Engineer - Cohort 7 Streaming vs Batch: Two Philosophies of Data Processing The Agent Loop: How AI Goes From Answering Questions to Doing Things ChatGPT vs Gemini vs Claude: How They Differ LAST CALL FOR ENROLLMENT: Become an AI Engineer - Cohort 7 Proof of Human: How to Verify a Person Is Real and Unique Multi-Region Architecture: Going Global Without Going Broke How OpenAI Delivers Low-Latency Voice AI for 900M Users Inside Thinking Machines’ Interaction Models How AI Agents Manage Memory and Avoid Forgetfulness EP220: RAG vs Graph RAG vs Agentic RAG Top Anti-Patterns to Avoid in Service Architecture Large Language Models vs Small Language Models An Ex-Meta L8’s Agentic Engineering Setup AI-Native Leaders: The Organizational Playbook for Engineering Transformation at Scale EP219: 12 Open-source LLMs Observability for Beginners: Logs, Metrics, Traces, and Everything Around Them LAST CALL FOR ENROLLMENT: Build with Claude Code - Cohort 2 How Open-Weight Models Changed the AI Landscape A Guide to AI Inference Engineering EP218: The Typical AI Agent Stack, Explained Must- Know Deployment Strategies: From Big-Bang to Progressive Delivery Love Teaching? ByteByteGo Is Hiring Part-Time AI & Engineering Instructors What Salesforce Learned from 20,000 Enterprise Agent Deployments Token Spend Out of Control? The Case for Smarter Routing EP217: Latency vs Throughput vs Bandwidth The Path of a Request: A Tour of Modern Web Architecture How OpenAI Built Its Data Agent A Practical Guide to Becoming an AI-Native Engineer How DoorDash Built a Testing System to Evaluate LLMs Must-Know Failure Modes in Distributed Systems How Airtable Built the Search Layer Behind Their AI Features How Vercel Cut Build Wait Times From 90 Seconds To 5 How CockroachDB Built Vector Indexing at Scale 🚀 New cohort based course launch: Build with Claude Code A Guide to Async Patterns in API Design How Netflix is Using Multimodal AI to Power Video Search How Snapchat Serves a Billion Predictions Per Second How Grab is Using AI Agents to Boost Team Productivity EP215: The Anatomy of an AI Agent LAST CALL FOR ENROLLMENT: Become an AI Engineer - Cohort 6 A Guide To Event-Driven Architectural Patterns High Performance Rate Limiting at Databricks How Figma Upgraded Data Pipeline from Multi-Day Latency to Real-Time How Pinterest Built a Production MCP Ecosystem EP214: Claude Code vs. OpenClaw: 5 Design Dimensions Become an AI Engineer | Enrollment Ends Soon Container Design Patterns for Distributed Systems How Instacart Built a Search for Billions of Products Connecting LLMs to the Real World: Tool Use, Function Calling, and MCP EP213: MCP vs Skills, Clearly Explained A Beginner’s Guide to Kubernetes The Tech Stack Powering Wise How Stripe Detects Fraudulent Transactions Within 100 ms How Amazon Uses LLMs to Recommend Products EP212: Data Warehouse vs Data Lake vs Data Mesh B-Trees vs LSM Trees: Comparison and Trade-Offs How DoorDash Launches a New Country in One Week The Security Architecture of GitHub Agentic Workflow EP211: How the JVM Works A Guide to Relational Database Design Figma Design to Code, Code to Design: Clearly Explained How LinkedIn Feed Uses LLMs to Serve 1.3 Billion Users EP210: Monolithic vs Microservices vs Serverless Must-Know Cross-Cutting Concerns in API Development How Spotify Ships to 675 Million Users Every Week Without Breaking Things Nextdoor’s Database Evolution: A Scaling Ladder A Guide to Context Engineering for LLMs EP209: 12 Claude Code Features Every Engineer Should Know Our New Book on Behavioral Interviews Is Now Available on Amazon Database Performance Strategies and Their Hidden Costs How Datadog Redefined Data Replication How Meta Turned Debugging Into a Product How Roblox Uses AI to Translate 16 Languages in 100 Milliseconds EP208: Load Balancer vs API Gateway LAST CALL FOR ENROLLMENT: Become an AI Engineer - Cohort 5 How to Implement API Security How Anthropic’s Claude Thinks How Netflix Live Streams to 100 Million Devices in 60 Seconds How Agentic RAG Works? Last Chance to Enroll | Become an AI Engineer | Cohort-Based Course EP207: Top 12 GitHub AI Repositories Event Sourcing Explained: Benefits and Use Cases How OpenAI Codex Works
EP216: RAGs vs Agents
ByteByteGo · 2026-05-23 · via ByteByteGo Newsletter

QA Wolf’s AI agent maps and tests your app’s most complex user flows. It turns your prompts into real Playwright and Appium code that runs 12x faster and more reliably than other computer-use agents.

What sets our AI apart:

  • Maps 200+ test cases in minutes instead of weeks of manual planning.

  • Executes tests 12x faster than computer-use agents.

  • Runs entire suites 100% parallel with consistent results.

  • Produces open-source tests your team owns, with zero vendor lock-in.

Get started today

This week’s system design refresher:

  • RAGs vs Agents

  • Build with Claude Code: New Cohort Launch

  • Forward Proxy, Reverse Proxy, and API Gateway Explained

  • How does a request actually travel through Claude Code?

  • How does Claude Code keep long sessions from running out of context?

Ask an LLM about your company's data and it will guess. The two patterns that fix this are RAG and agents, and they solve different problems.

Image

RAGs: RAGs combine LLMs with retrieval to ground answers in 4 steps.

  • Step 1: The user query is embedded and sent to a retrieval step.

  • Step 2: Retrieval pulls the most relevant chunks from a knowledge base (PDFs, wikis, etc.)

  • Step 3: Those chunks are pasted into the prompt as context.

  • Step 4: The LLM writes the answer, grounded in the retrieved text.

One retrieval. One generation. Cheap, predictable, and easy to debug.

Agents: Agents wrap LLMs in a reasoning loop with tools to take action.

  • Step 1: The user query goes into the agent runtime. A reasoning loop wrapped around an LLM.

  • Step 2: The LLM reads the goal and picks a tool (Read, Write, Edit, Bash, etc.)

  • Step 3: The runtime executes the tool and feeds the result back to the LLM.

  • Step 4: The LLM reasons again, picks the next tool, and loops until the task is done.

More flexible. More tokens. Harder to debug because errors drift across steps.

The rule of thumb: Use RAG when the answer lives in your documents. Use an agent when the answer requires action on other systems.

Over to you: When do you prefer RAG over agent?

We’re launching a new 2 day intensive, cohort based course called Build with Claude Code, taught by John Kim, who has trained hundreds of engineers at Meta to use Claude Code in real production workflows.

The course starts soon on May 28.

Check it out now

A few things you’ll learn:

  • The agentic loop, context engineering, and memory layers that make Claude Code useful for real projects

  • How to build with Claude Code Skills, MCPs, and hooks to give Claude the tools and feedback loops it needs to self correct

  • Parallel development with Git worktrees, subagents, and agent teams

  • A capstone project where you ship something real on your own stack

The course includes live sessions, assignments, and office hours, so there’s plenty of room to ask questions and get unstuck.

The first cohort starts in just a few days: May 28 to 29, 2026. If you want to learn everything from the fundamentals of Claude Code to advanced production workflows, including working with large codebases, this could be a great way to level up.

Check it out now

People mix these up all the time, since they all sit between a client and a server. The real difference is which side they represent and what problem they solve.

Image

A forward proxy sits next to the client. Your laptop sends a request, the proxy forwards it out, and the destination never sees your real IP. Corporate networks use this to enforce policy, block sites, and cache traffic.

A reverse proxy sits next to the server. The client has no idea how many machines are behind it. The proxy decides who handles the request, terminates TLS, and keeps your backend off the public internet. NGINX and HAProxy are commonly used here, typically paired with a load balancer in front.

An API gateway is a reverse proxy that does more than route traffic. It also handles auth, rate limits, API keys, versioning, and request shaping. Without it, each microservice has to implement its own version of validation, throttling logic, and request logging.

A forward proxy represents the client, a reverse proxy represents the server, and an API gateway is what you add when ten services need the same authentication and rate limiting rules applied consistently.

In most real systems, all three are running at different layers. The forward proxy filters outbound traffic, the reverse proxy fronts the application servers, and the API gateway sits in front of your APIs to enforce policies before requests reach them.

Over to you: What's your proxy + gateway combo? Always interesting to see what teams pair together.

Most of us type a prompt and watch the magic happen. The diagram below shows what's really going on behind the curtain, based on the Claude Code source code.

graphical user interface, application

Let's trace one real request: "Fix the failing test in auth.test.ts."

  • Step 1: The user sends a prompt to Claude Code through their interface.

  • Step 2: The interface (CLI, IDE, or SDK) wraps the prompt with repo and file context and hands it to the agent loop as a request.

  • Step 3: The agent loop plans the next move and proposes an action: Edit(auth.ts, lines 42–58).

  • Step 4: The permission system checks the proposed action against the rules.

  • Step 5: The approved action becomes a tool call: Edit(auth.ts, patch), dispatched to the matching tool.

  • Step 6: The tool runs in the execution environment (shell, cloud, or sandbox) as a real syscall.

  • Step 7: The execution returns a tool result back to the agent loop.

  • Step 8: The agent persists the turn to state and streams the final message to the user.

The whole system is just this loop, repeated until the model stops asking for tools.

Over to you: which step in this loop do you think is the hardest one to get right when building your own coding agent?

It uses 5 strategies, run in sequence before every model call. Each one only runs if the previous doesn’t free enough room.

  1. Budget Reduction: caps individual tool results. Oversized outputs are swapped for a content reference.

  2. Snip: trims the oldest history segments and emits a boundary marker.

  3. Microcompact: prunes tool turns by tool_use_id so the prompt cache stays warm.

  4. Context Collapse: a read-time projection over the full history.

  5. Auto-compact: the last resort. It calls the model to produce a full summary of prior turns.

The pattern is lazy degradation: apply the least disruptive shaper first, escalate only when cheaper layers prove insufficient.

Over to you: how often do you run out of context?

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