⚡ Deploy this in under 10 minutes How to Deploy Claude 3.5 Sonnet with Anthropic API Caching on a $5/Month DigitalOcean Droplet: 50% Cost Reduction for Production RAG Stop overpaying for AI APIs. If you're running RAG pipelines in production, you're probably watching your Claude API bill climb every month. But here's what most developers miss: Anthropic's prompt caching can cut your token costs in half , and combining it with a self-hosted proxy layer on a cheap DigitalOcean droplet gives you both cost control and architectural flexibility. I built this setup last month. It now runs 24/7 without touching it, processes 50,000+ cached tokens daily, and costs me $5/month in infrastructure. The system intercepts API calls, manages cache headers, and routes requests through Anthropic's native caching mechanism—no local model running, no complex orchestration. Just smart request routing. This article shows you exactly how to build it. Why This Matters: The Economics of Cached LLMs Let's talk numbers.…