LLM Token Economics, TTFT/TPOT Latency Breakdown & ROI Optimization defines the quantitative systems and financial engineering required to scale GenAI applications economically; the latency taxonomy comprises: 1) Time to First Token (TTFT: prefill phase computation), 2) Time Per Output Token (TPOT: autoregressive decoding speed), and 3) End-to-End Latency (
TTFT+Nout×TPOT); core cost-optimization levers encompass: Multi-tier Semantic Caching (reducing API calls by 30%-50%), Prompt Caching (saving 75% on repeated prefix tokens), Model Cascades/Routers (dispatching 80% of low-complexity queries to small cheap models, reserving flagship LLMs for complex tasks), and Speculative Decoding.