Use Claude Code for 95% Less: The Open-Source Proxy Setup

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A proxy setup routes Claude Code's API calls through OpenRouter at $0.14 per million tokens — compared to Anthropic's standard $5 per million, that is a 97% cost reduction. The open-source free-claude-code proxy intercepts every call from the Claude Code CLI and redirects it to whichever model you configure, while keeping the same interface you already use.

How Does the Proxy Work?

The proxy sits between the Claude Code CLI and the Anthropic API. When Claude Code makes a request, the proxy intercepts it, rewrites the endpoint and authentication headers, and forwards it to OpenRouter (or any compatible API). The CLI never knows the difference — it sends the same request it always does, and gets back a response in the same format.

From your perspective, nothing changes except the bill.

Setup involves cloning the free-claude-code repository, configuring your OpenRouter API key in a config file, and launching Claude Code with an environment variable pointing to the local proxy. Three steps, under 10 minutes.

What Models Can You Use Through the Proxy?

Any model on OpenRouter, which includes most major providers. The practical options:

• DeepSeek R1 and V3 — strong coding performance at extremely low cost, good for implementation work
• Gemini 2.5 Pro — large context window, useful for tasks requiring full codebase reading
• Llama 4 — Meta's latest, available via OpenRouter at low per-token cost
• NVIDIA NIM — free GLM 4.7 with account registration, zero cost for eligible use
• Ollama — local models with no API cost at all, slower but fully private

What Is the Hybrid Architecture and Why Does It Perform Better?

The hybrid approach uses Claude Opus as the orchestrator — the main session that coordinates tasks — and routes sub-agent work to DeepSeek or another cheaper model. Research on sub-agent coding systems shows this combination produces around 15% better results than using a single model for everything.

The orchestrator needs strong reasoning. Sub-agents need strong coding at low cost. Routing each to the right model optimises for both.

In practice, you configure the proxy to send orchestrator requests to Opus and sub-agent requests to DeepSeek. The cost difference between Opus-only and the hybrid is significant at scale — especially for tasks that spawn many sub-agents.

What Are the Tradeoffs of Using Cheaper Models?

The honest answer: cheaper models make more mistakes on complex reasoning tasks. For straightforward implementation work — writing a function from a clear spec, adding a field to a form, generating tests for existing code — the quality difference is small. For architectural decisions, complex debugging, and tasks requiring nuanced judgment, Claude Sonnet or Opus produces better output.

Use cheap models where the task is well-defined. Use capable models where the task requires judgment.

The proxy makes this easy to adjust — change the model in the config file and restart. You can run different models on different days or for different project types.

How Do You Set Up the Proxy Step by Step?

1. Clone the free-claude-code repository from GitHub
2. Run npm install to install dependencies
3. Create a .env file with your OpenRouter API key: OPENROUTER_API_KEY=your_key_here
4. Set the model in the config: MODEL=deepseek/deepseek-r1 or any OpenRouter model ID
5. Start the proxy: npm start
6. In a new terminal, launch Claude Code with: ANTHROPIC_BASE_URL=http://localhost:3000 claude

The proxy runs locally on port 3000. Every Claude Code API call routes through it automatically.

Frequently Asked Questions

Is this setup allowed by Anthropic's terms of service?

The proxy routes calls away from Anthropic's API to other providers. You are not using Anthropic's infrastructure for these calls — you are using OpenRouter's. Check the terms of service for each provider you route through. Most commercial use is permitted with the relevant paid API account.

Does the proxy affect Claude Code's tool use and file editing?

The proxy handles the API call layer only. File reading, writing, and bash execution happen locally through Claude Code's built-in tools. The model on the other end of the proxy does not need special capabilities for these — it just needs to produce valid tool call responses, which all major models support.

How do you measure whether the cost saving is real?

OpenRouter's dashboard shows per-request token counts and costs. Run the same task with Claude directly and then with the proxy. The token counts will be similar; the per-token cost will be significantly lower. For a week of typical coding work, the difference is visible in both dashboards.

What happens if the local proxy crashes mid-session?

Claude Code will report a connection error. Restart the proxy and continue — Claude Code will reconnect on the next request. For critical sessions, keep a terminal with the proxy visible so you notice if it stops. The proxy is a simple Node.js process and restarts in under five seconds.

Full setup walkthrough: Claude Code for 95% Less on YouTube

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