feat: opt-in key folding and path expansion (closes #86)

README.md

@@ -4,7 +4,7 @@
 
 [![CI](https://github.com/toon-format/toon/actions/workflows/ci.yml/badge.svg)](https://github.com/toon-format/toon/actions)
 [![npm version](https://img.shields.io/npm/v/@toon-format/toon.svg)](https://www.npmjs.com/package/@toon-format/toon)
-[![SPEC v1.4](https://img.shields.io/badge/spec-v1.4-lightgray)](https://github.com/toon-format/spec)
+[![SPEC v1.5](https://img.shields.io/badge/spec-v1.5-lightgray)](https://github.com/toon-format/spec)
 [![npm downloads (total)](https://img.shields.io/npm/dt/@toon-format/toon.svg)](https://www.npmjs.com/package/@toon-format/toon)
 [![License: MIT](https://img.shields.io/badge/license-MIT-blue.svg)](./LICENSE)
 
@@ -80,6 +80,7 @@ See [benchmarks](#benchmarks) for concrete comparisons across different data str
 - 🍱 **Minimal syntax:** removes redundant punctuation (braces, brackets, most quotes)
 - 📐 **Indentation-based structure:** like YAML, uses whitespace instead of braces
 - 🧺 **Tabular arrays:** declare keys once, stream data as rows
+- 🔗 **Optional key folding (v1.5):** collapses single-key wrapper chains into dotted paths (e.g., `data.metadata.items`) to reduce indentation and tokens
 
 [^1]: For flat tabular data, CSV is more compact. TOON adds minimal overhead to provide explicit structure and validation that improves LLM reliability.
 
@@ -736,6 +737,9 @@ cat data.toon | npx @toon-format/cli --decode
 | `--length-marker` | Add `#` prefix to array lengths (e.g., `items[#3]`) |
 | `--stats` | Show token count estimates and savings (encode only) |
 | `--no-strict` | Disable strict validation when decoding |
+| `--key-folding <mode>` | Key folding mode: `off`, `safe` (default: `off`) - collapses nested chains (v1.5) |
+| `--flatten-depth <number>` | Maximum segments to fold (default: `Infinity`) - requires `--key-folding safe` (v1.5) |
+| `--expand-paths <mode>` | Path expansion mode: `off`, `safe` (default: `off`) - reconstructs dotted keys (v1.5) |
 
 ### Examples
 
@@ -752,6 +756,9 @@ npx @toon-format/cli data.json --delimiter "|" --length-marker -o output.toon
 # Lenient decoding (skip validation)
 npx @toon-format/cli data.toon --no-strict -o output.json
 
+# Key folding for nested data (v1.5)
+npx @toon-format/cli data.json --key-folding safe -o output.toon
+
 # Stdin workflows
 echo '{"name": "Ada", "age": 30}' | npx @toon-format/cli --stats
 cat large-dataset.json | npx @toon-format/cli --delimiter "\t" > output.toon
@@ -797,6 +804,40 @@ user:
   name: Ada
 ```
 
+### Key Folding (Optional)
+
+New in v1.5: Optionally collapse single-key wrapper chains into dotted paths to reduce tokens. Enable with `keyFolding: 'safe'`.
+
+Standard nesting:
+
+```
+data:
+  metadata:
+    items[2]: a,b
+```
+
+With key folding:
+
+```
+data.metadata.items[2]: a,b
+```
+
+Round-trip with path expansion:
+
+```ts
+import { decode, encode } from '@toon-format/toon'
+
+const original = { data: { metadata: { items: ['a', 'b'] } } }
+
+const toon = encode(original, { keyFolding: 'safe' })
+// → "data.metadata.items[2]: a,b"
+
+const restored = decode(toon, { expandPaths: 'safe' })
+// → Matches original structure
+```
+
+See §13.4 in the [specification](https://github.com/toon-format/spec/blob/main/SPEC.md#134-key-folding-and-path-expansion) for folding rules and safety guarantees.
+
 ### Arrays
 
 > [!TIP]
@@ -975,6 +1016,8 @@ Converts any JSON-serializable value to TOON format.
   - `indent?: number` – Number of spaces per indentation level (default: `2`)
   - `delimiter?: ',' | '\t' | '|'` – Delimiter for array values and tabular rows (default: `','`)
   - `lengthMarker?: '#' | false` – Optional marker to prefix array lengths (default: `false`)
+  - `keyFolding?: 'off' | 'safe'` – Enable key folding to collapse single-key wrapper chains into dotted paths (default: `'off'`). When `'safe'`, only valid identifier segments are folded (v1.5)
+  - `flattenDepth?: number` – Maximum number of segments to fold when `keyFolding` is enabled (default: `Infinity`). Values 0-1 have no practical effect (v1.5)
 
 **Returns:**
 
@@ -1096,6 +1139,7 @@ Converts a TOON-formatted string back to JavaScript values.
 - `options` – Optional decoding options:
   - `indent?: number` – Expected number of spaces per indentation level (default: `2`)
   - `strict?: boolean` – Enable strict validation (default: `true`)
+  - `expandPaths?: 'off' | 'safe'` – Enable path expansion to reconstruct dotted keys into nested objects (default: `'off'`). Pairs with `keyFolding: 'safe'` for lossless round-trips (v1.5)
 
 **Returns:**
 
@@ -1223,7 +1267,7 @@ Task: Return only users with role "user" as TOON. Use the same header. Set [N] t
 ## Other Implementations
 
 > [!NOTE]
-> When implementing TOON in other languages, please follow the [specification](https://github.com/toon-format/spec/blob/main/SPEC.md) (currently v1.4) to ensure compatibility across implementations. The [conformance tests](https://github.com/toon-format/spec/tree/main/tests) provide language-agnostic test fixtures that validate implementations across any language.
+> When implementing TOON in other languages, please follow the [specification](https://github.com/toon-format/spec/blob/main/SPEC.md) (currently v1.5) to ensure compatibility across implementations. The [conformance tests](https://github.com/toon-format/spec/tree/main/tests) provide language-agnostic test fixtures that validate your implementations.
 
 ### Official Implementations
 

packages/cli/README.md

@@ -65,6 +65,9 @@ cat data.toon | toon --decode
 | `--length-marker` | Add `#` prefix to array lengths (e.g., `items[#3]`) |
 | `--stats` | Show token count estimates and savings (encode only) |
 | `--no-strict` | Disable strict validation when decoding |
+| `--key-folding <mode>` | Enable key folding: `off`, `safe` (default: `off`) - v1.5 |
+| `--flatten-depth <number>` | Maximum folded segment count when key folding is enabled (default: `Infinity`) - v1.5 |
+| `--expand-paths <mode>` | Enable path expansion: `off`, `safe` (default: `off`) - v1.5 |
 
 ## Advanced Examples
 
@@ -119,12 +122,81 @@ cat large-dataset.json | toon --delimiter "\t" > output.toon
 jq '.results' data.json | toon > filtered.toon
 ```
 
+### Key Folding (v1.5)
+
+Collapse nested wrapper chains to reduce tokens:
+
+#### Basic key folding
+
+```bash
+# Encode with key folding
+toon input.json --key-folding safe -o output.toon
+```
+
+For data like:
+```json
+{
+  "data": {
+    "metadata": {
+      "items": ["a", "b"]
+    }
+  }
+}
+```
+
+Output becomes:
+```
+data.metadata.items[2]: a,b
+```
+
+Instead of:
+```
+data:
+  metadata:
+    items[2]: a,b
+```
+
+#### Limit folding depth
+
+```bash
+# Fold maximum 2 levels deep
+toon input.json --key-folding safe --flatten-depth 2 -o output.toon
+```
+
+#### Path expansion on decode
+
+```bash
+# Reconstruct nested structure from folded keys
+toon data.toon --expand-paths safe -o output.json
+```
+
+#### Round-trip workflow
+
+```bash
+# Encode with folding
+toon input.json --key-folding safe -o compressed.toon
+
+# Decode with expansion (restores original structure)
+toon compressed.toon --expand-paths safe -o output.json
+
+# Verify round-trip
+diff input.json output.json
+```
+
+#### Combined with other options
+
+```bash
+# Key folding + tab delimiter + stats
+toon data.json --key-folding safe --delimiter "\t" --stats -o output.toon
+```
+
 ## Why Use the CLI?
 
 - **Quick conversions** between formats without writing code
 - **Token analysis** to see potential savings before sending to LLMs
 - **Pipeline integration** with existing JSON-based workflows
 - **Flexible formatting** with delimiter and indentation options
+- **Key folding (v1.5)** to collapse nested wrappers for additional token savings
 
 ## Related
 

packages/cli/src/conversion.ts

@@ -1,4 +1,4 @@
-import type { DecodeOptions, Delimiter, EncodeOptions } from '../../toon/src'
+import type { DecodeOptions, EncodeOptions } from '../../toon/src'
 import type { InputSource } from './types'
 import * as fsp from 'node:fs/promises'
 import * as path from 'node:path'
@@ -11,9 +11,11 @@ import { formatInputLabel, readInput } from './utils'
 export async function encodeToToon(config: {
   input: InputSource
   output?: string
-  delimiter: Delimiter
+  indent: NonNullable<EncodeOptions['indent']>
-  indent: number
+  delimiter: NonNullable<EncodeOptions['delimiter']>
   lengthMarker: NonNullable<EncodeOptions['lengthMarker']>
+  keyFolding?: NonNullable<EncodeOptions['keyFolding']>
+  flattenDepth?: number
   printStats: boolean
 }): Promise<void> {
   const jsonContent = await readInput(config.input)
@@ -30,6 +32,8 @@ export async function encodeToToon(config: {
     delimiter: config.delimiter,
     indent: config.indent,
     lengthMarker: config.lengthMarker,
+    keyFolding: config.keyFolding,
+    flattenDepth: config.flattenDepth,
   }
 
   const toonOutput = encode(data, encodeOptions)
@@ -59,8 +63,9 @@ export async function encodeToToon(config: {
 export async function decodeToJson(config: {
   input: InputSource
   output?: string
-  indent: number
+  indent: NonNullable<DecodeOptions['indent']>
-  strict: boolean
+  strict: NonNullable<DecodeOptions['strict']>
+  expandPaths?: NonNullable<DecodeOptions['expandPaths']>
 }): Promise<void> {
   const toonContent = await readInput(config.input)
 
@@ -69,6 +74,7 @@ export async function decodeToJson(config: {
     const decodeOptions: DecodeOptions = {
       indent: config.indent,
       strict: config.strict,
+      expandPaths: config.expandPaths,
     }
     data = decode(toonContent, decodeOptions)
   }

packages/cli/src/index.ts

@@ -1,5 +1,5 @@
 import type { CommandDef } from 'citty'
-import type { Delimiter } from '../../toon/src'
+import type { DecodeOptions, Delimiter, EncodeOptions } from '../../toon/src'
 import type { InputSource } from './types'
 import * as path from 'node:path'
 import process from 'node:process'
@@ -51,6 +51,20 @@ export const mainCommand: CommandDef<{
     description: string
     default: true
   }
+  keyFolding: {
+    type: 'string'
+    description: string
+    default: string
+  }
+  flattenDepth: {
+    type: 'string'
+    description: string
+  }
+  expandPaths: {
+    type: 'string'
+    description: string
+    default: string
+  }
   stats: {
     type: 'boolean'
     description: string
@@ -103,6 +117,20 @@ export const mainCommand: CommandDef<{
       description: 'Enable strict mode for decoding',
       default: true,
     },
+    keyFolding: {
+      type: 'string',
+      description: 'Enable key folding: off, safe (default: off)',
+      default: 'off',
+    },
+    flattenDepth: {
+      type: 'string',
+      description: 'Maximum folded segment count when key folding is enabled (default: Infinity)',
+    },
+    expandPaths: {
+      type: 'string',
+      description: 'Enable path expansion: off, safe (default: off)',
+      default: 'off',
+    },
     stats: {
       type: 'boolean',
       description: 'Show token statistics',
@@ -129,6 +157,27 @@ export const mainCommand: CommandDef<{
       throw new Error(`Invalid delimiter "${delimiter}". Valid delimiters are: comma (,), tab (\\t), pipe (|)`)
     }
 
+    // Validate `keyFolding`
+    const keyFolding = args.keyFolding || 'off'
+    if (keyFolding !== 'off' && keyFolding !== 'safe') {
+      throw new Error(`Invalid keyFolding value "${keyFolding}". Valid values are: off, safe`)
+    }
+
+    // Parse and validate `flattenDepth`
+    let flattenDepth: number | undefined
+    if (args.flattenDepth !== undefined) {
+      flattenDepth = Number.parseInt(args.flattenDepth, 10)
+      if (Number.isNaN(flattenDepth) || flattenDepth < 0) {
+        throw new Error(`Invalid flattenDepth value: ${args.flattenDepth}`)
+      }
+    }
+
+    // Validate `expandPaths`
+    const expandPaths = args.expandPaths || 'off'
+    if (expandPaths !== 'off' && expandPaths !== 'safe') {
+      throw new Error(`Invalid expandPaths value "${expandPaths}". Valid values are: off, safe`)
+    }
+
     const mode = detectMode(inputSource, args.encode, args.decode)
 
     try {
@@ -140,6 +189,8 @@ export const mainCommand: CommandDef<{
           indent,
           lengthMarker: args.lengthMarker === true ? '#' : false,
           printStats: args.stats === true,
+          keyFolding: keyFolding as NonNullable<EncodeOptions['keyFolding']>,
+          flattenDepth,
         })
       }
       else {
@@ -148,6 +199,7 @@ export const mainCommand: CommandDef<{
           output: outputPath,
           indent,
           strict: args.strict !== false,
+          expandPaths: expandPaths as NonNullable<DecodeOptions['expandPaths']>,
         })
       }
     }

packages/toon/src/constants.ts

@@ -12,6 +12,7 @@ export const COLON = ':'
 export const SPACE = ' '
 export const PIPE = '|'
 export const HASH = '#'
+export const DOT = '.'
 
 // #endregion
 

packages/toon/src/decode/expand.ts

@@ -0,0 +1,196 @@
+import type { JsonObject, JsonValue } from '../types'
+import { DOT } from '../constants'
+import { isJsonObject } from '../encode/normalize'
+import { isIdentifierSegment } from '../shared/validation'
+
+// #region Path expansion (safe)
+
+/**
+ * Checks if two values can be merged (both are plain objects).
+ */
+function canMerge(a: JsonValue, b: JsonValue): a is JsonObject {
+  return isJsonObject(a) && isJsonObject(b)
+}
+
+/**
+ * Expands dotted keys into nested objects in safe mode.
+ *
+ * @remarks
+ * This function recursively traverses a decoded TOON value and expands any keys
+ * containing dots (`.`) into nested object structures, provided all segments
+ * are valid identifiers.
+ *
+ * Expansion rules:
+ * - Keys containing dots are split into segments
+ * - All segments must pass `isIdentifierSegment` validation
+ * - Non-eligible keys (with special characters) are left as literal dotted keys
+ * - Deep merge: When multiple dotted keys expand to the same path, their values are merged if both are objects
+ * - Conflict handling:
+ *   - `strict=true`: Throws TypeError on conflicts (non-object collision)
+ *   - `strict=false`: LWW (silent overwrite)
+ *
+ * @param value - The decoded value to expand
+ * @param strict - Whether to throw errors on conflicts
+ * @returns The expanded value with dotted keys reconstructed as nested objects
+ * @throws TypeError if conflicts occur in strict mode
+ */
+export function expandPathsSafe(value: JsonValue, strict: boolean): JsonValue {
+  if (Array.isArray(value)) {
+    // Recursively expand array elements
+    return value.map(item => expandPathsSafe(item, strict))
+  }
+
+  if (isJsonObject(value)) {
+    const result: JsonObject = {}
+    const keys = Object.keys(value)
+
+    for (const key of keys) {
+      const val = value[key]!
+
+      // Check if key contains dots
+      if (key.includes(DOT)) {
+        const segments = key.split(DOT)
+
+        // Validate all segments are identifiers
+        if (segments.every(seg => isIdentifierSegment(seg))) {
+          // Expand this dotted key
+          const expandedValue = expandPathsSafe(val, strict)
+          insertPathSafe(result, segments, expandedValue, strict)
+          continue
+        }
+      }
+
+      // Not expandable - keep as literal key, but still recursively expand the value
+      result[key] = expandPathsSafe(val, strict)
+    }
+
+    return result
+  }
+
+  // Primitive value - return as-is
+  return value
+}
+
+/**
+ * Inserts a value at a nested path, creating intermediate objects as needed.
+ *
+ * @remarks
+ * This function walks the segment path, creating nested objects as needed.
+ * When an existing value is encountered:
+ * - If both are objects: deep merge (continue insertion)
+ * - If values differ: conflict
+ *   - strict=true: throw TypeError
+ *   - strict=false: overwrite with new value (last-wins)
+ *
+ * @param target - The object to insert into
+ * @param segments - Array of path segments (e.g., ['data', 'metadata', 'items'])
+ * @param value - The value to insert at the end of the path
+ * @param strict - Whether to throw on conflicts
+ * @throws TypeError if a conflict occurs in strict mode
+ */
+function insertPathSafe(
+  target: JsonObject,
+  segments: readonly string[],
+  value: JsonValue,
+  strict: boolean,
+): void {
+  let current: JsonObject = target
+
+  // Walk to the penultimate segment, creating objects as needed
+  for (let i = 0; i < segments.length - 1; i++) {
+    const seg = segments[i]!
+    const existing = current[seg]
+
+    if (existing === undefined) {
+      // Create new intermediate object
+      const newObj: JsonObject = {}
+      current[seg] = newObj
+      current = newObj
+    }
+    else if (isJsonObject(existing)) {
+      // Continue into existing object
+      current = existing
+    }
+    else {
+      // Conflict: existing value is not an object
+      if (strict) {
+        throw new TypeError(
+          `Path expansion conflict at segment "${seg}": expected object but found ${typeof existing}`,
+        )
+      }
+      // Non-strict: overwrite with new object
+      const newObj: JsonObject = {}
+      current[seg] = newObj
+      current = newObj
+    }
+  }
+
+  // Insert at the final segment
+  const lastSeg = segments[segments.length - 1]!
+  const existing = current[lastSeg]
+
+  if (existing === undefined) {
+    // No conflict - insert directly
+    current[lastSeg] = value
+  }
+  else if (canMerge(existing, value)) {
+    // Both are objects - deep merge
+    mergeObjects(existing as JsonObject, value as JsonObject, strict)
+  }
+  else {
+    // Conflict: incompatible types
+    if (strict) {
+      throw new TypeError(
+        `Path expansion conflict at key "${lastSeg}": cannot merge ${typeof existing} with ${typeof value}`,
+      )
+    }
+    // Non-strict: overwrite (LWW)
+    current[lastSeg] = value
+  }
+}
+
+/**
+ * Deep merges properties from source into target.
+ *
+ * @remarks
+ * For each key in source:
+ * - If key doesn't exist in target: copy it
+ * - If both values are objects: recursively merge
+ * - Otherwise: conflict (strict throws, non-strict overwrites)
+ *
+ * @param target - The target object to merge into
+ * @param source - The source object to merge from
+ * @param strict - Whether to throw on conflicts
+ * @throws TypeError if a conflict occurs in strict mode
+ */
+function mergeObjects(
+  target: JsonObject,
+  source: JsonObject,
+  strict: boolean,
+): void {
+  for (const key of Object.keys(source)) {
+    const sourceValue = source[key]!
+    const targetValue = target[key]
+
+    if (targetValue === undefined) {
+      // Key doesn't exist in target - copy it
+      target[key] = sourceValue
+    }
+    else if (canMerge(targetValue, sourceValue)) {
+      // Both are objects - recursively merge
+      mergeObjects(targetValue as JsonObject, sourceValue as JsonObject, strict)
+    }
+    else {
+      // Conflict: incompatible types
+      if (strict) {
+        throw new TypeError(
+          `Path expansion conflict at key "${key}": cannot merge ${typeof targetValue} with ${typeof sourceValue}`,
+        )
+      }
+      // Non-strict: overwrite (LWW)
+      target[key] = sourceValue
+    }
+  }
+}
+
+// #endregion

packages/toon/src/encode/encoders.ts

@@ -1,5 +1,6 @@
 import type { Depth, JsonArray, JsonObject, JsonPrimitive, JsonValue, ResolvedEncodeOptions } from '../types'
 import { LIST_ITEM_MARKER } from '../constants'
+import { tryFoldKeyChain } from './folding'
 import { isArrayOfArrays, isArrayOfObjects, isArrayOfPrimitives, isJsonArray, isJsonObject, isJsonPrimitive } from './normalize'
 import { encodeAndJoinPrimitives, encodeKey, encodePrimitive, formatHeader } from './primitives'
 import { LineWriter } from './writer'
@@ -31,11 +32,46 @@ export function encodeObject(value: JsonObject, writer: LineWriter, depth: Depth
   const keys = Object.keys(value)
 
   for (const key of keys) {
-    encodeKeyValuePair(key, value[key]!, writer, depth, options)
+    encodeKeyValuePair(key, value[key]!, writer, depth, options, keys)
   }
 }
 
-export function encodeKeyValuePair(key: string, value: JsonValue, writer: LineWriter, depth: Depth, options: ResolvedEncodeOptions): void {
+export function encodeKeyValuePair(key: string, value: JsonValue, writer: LineWriter, depth: Depth, options: ResolvedEncodeOptions, siblings?: readonly string[]): void {
+  // Attempt key folding when enabled
+  if (options.keyFolding === 'safe' && siblings) {
+    const foldResult = tryFoldKeyChain(key, value, siblings, options)
+
+    if (foldResult) {
+      const { foldedKey, remainder, leafValue } = foldResult
+      const encodedFoldedKey = encodeKey(foldedKey)
+
+      // Case 1: Fully folded to a leaf value
+      if (remainder === undefined) {
+        // The folded chain ended at a leaf (primitive, array, or empty object)
+        if (isJsonPrimitive(leafValue)) {
+          writer.push(depth, `${encodedFoldedKey}: ${encodePrimitive(leafValue, options.delimiter)}`)
+          return
+        }
+        else if (isJsonArray(leafValue)) {
+          encodeArray(foldedKey, leafValue, writer, depth, options)
+          return
+        }
+        else if (isJsonObject(leafValue) && Object.keys(leafValue).length === 0) {
+          writer.push(depth, `${encodedFoldedKey}:`)
+          return
+        }
+      }
+
+      // Case 2: Partially folded with a tail object
+      if (isJsonObject(remainder)) {
+        writer.push(depth, `${encodedFoldedKey}:`)
+        encodeObject(remainder, writer, depth + 1, options)
+        return
+      }
+    }
+  }
+
+  // No folding applied - use standard encoding
   const encodedKey = encodeKey(key)
 
   if (isJsonPrimitive(value)) {

packages/toon/src/encode/folding.ts

@@ -0,0 +1,173 @@
+import type { JsonValue, ResolvedEncodeOptions } from '../types'
+import { DOT } from '../constants'
+import { isIdentifierSegment } from '../shared/validation'
+import { isJsonObject } from './normalize'
+
+// #region Key folding helpers
+
+/**
+ * Result of attempting to fold a key chain.
+ */
+export interface FoldResult {
+  /**
+   * The folded key with dot-separated segments (e.g., "data.metadata.items")
+   */
+  foldedKey: string
+  /**
+   * The remainder value after folding:
+   * - `undefined` if the chain was fully folded to a leaf (primitive, array, or empty object)
+   * - An object if the chain was partially folded (depth limit reached with nested tail)
+   */
+  remainder?: JsonValue
+  /**
+   * The leaf value at the end of the folded chain.
+   * Used to avoid redundant traversal when encoding the folded value.
+   */
+  leafValue: JsonValue
+}
+
+/**
+ * Attempts to fold a single-key object chain into a dotted path.
+ *
+ * @remarks
+ * Folding traverses nested objects with single keys, collapsing them into a dotted path.
+ * It stops when:
+ * - A non-single-key object is encountered
+ * - An array is encountered (arrays are not "single-key objects")
+ * - A primitive value is reached
+ * - The flatten depth limit is reached
+ * - Any segment fails safe mode validation
+ *
+ * Safe mode requirements:
+ * - `options.keyFolding` must be `'safe'`
+ * - Every segment must be a valid identifier (no dots, no special chars)
+ * - The folded key must not collide with existing sibling keys
+ * - No segment should require quoting
+ *
+ * @param key - The starting key to fold
+ * @param value - The value associated with the key
+ * @param siblings - Array of all sibling keys at this level (for collision detection)
+ * @param options - Resolved encoding options
+ * @returns A FoldResult if folding is possible, undefined otherwise
+ */
+export function tryFoldKeyChain(
+  key: string,
+  value: JsonValue,
+  siblings: readonly string[],
+  options: ResolvedEncodeOptions,
+): FoldResult | undefined {
+  // Only fold when safe mode is enabled
+  if (options.keyFolding !== 'safe') {
+    return undefined
+  }
+
+  // Can only fold objects
+  if (!isJsonObject(value)) {
+    return undefined
+  }
+
+  // Collect the chain of single-key objects
+  const { segments, tail, leafValue } = collectSingleKeyChain(key, value, options.flattenDepth)
+
+  // Need at least 2 segments for folding to be worthwhile
+  if (segments.length < 2) {
+    return undefined
+  }
+
+  // Validate all segments are safe identifiers
+  if (!segments.every(seg => isIdentifierSegment(seg))) {
+    return undefined
+  }
+
+  // Build the folded key
+  const foldedKey = buildFoldedKey(segments)
+
+  // Check for collision with existing literal sibling keys (inline check)
+  if (siblings.includes(foldedKey)) {
+    return undefined
+  }
+
+  return {
+    foldedKey,
+    remainder: tail,
+    leafValue,
+  }
+}
+
+/**
+ * Collects a chain of single-key objects into segments.
+ *
+ * @remarks
+ * Traverses nested objects, collecting keys until:
+ * - A non-single-key object is found
+ * - An array is encountered
+ * - A primitive is reached
+ * - An empty object is reached
+ * - The depth limit is reached
+ *
+ * @param startKey - The initial key to start the chain
+ * @param startValue - The value to traverse
+ * @param maxDepth - Maximum number of segments to collect
+ * @returns Object containing segments array, tail value, and leaf value
+ */
+function collectSingleKeyChain(
+  startKey: string,
+  startValue: JsonValue,
+  maxDepth: number,
+): { segments: string[], tail: JsonValue | undefined, leafValue: JsonValue } {
+  const segments: string[] = [startKey]
+  let current = startValue
+
+  while (segments.length < maxDepth) {
+    // Must be an object to continue
+    if (!isJsonObject(current)) {
+      break
+    }
+
+    const keys = Object.keys(current)
+
+    // Must have exactly one key to continue the chain
+    if (keys.length !== 1) {
+      break
+    }
+
+    const nextKey = keys[0]!
+    const nextValue = current[nextKey]!
+
+    segments.push(nextKey)
+    current = nextValue
+  }
+
+  // Determine the tail - simplified with early returns
+  if (!isJsonObject(current)) {
+    // Array, primitive, or null - this is a leaf value
+    return { segments, tail: undefined, leafValue: current }
+  }
+
+  const keys = Object.keys(current)
+
+  if (keys.length === 0) {
+    // Empty object is a leaf
+    return { segments, tail: undefined, leafValue: current }
+  }
+
+  if (keys.length === 1 && segments.length === maxDepth) {
+    // Hit depth limit with remaining chain
+    return { segments, tail: current, leafValue: current }
+  }
+
+  // Multi-key object is the remainder
+  return { segments, tail: current, leafValue: current }
+}
+
+/**
+ * Builds a folded key from segments.
+ *
+ * @param segments - Array of key segments
+ * @returns Dot-separated key string
+ */
+function buildFoldedKey(segments: readonly string[]): string {
+  return segments.join(DOT)
+}
+
+// #endregion

packages/toon/src/index.ts

@@ -1,6 +1,7 @@
 import type { DecodeOptions, EncodeOptions, JsonValue, ResolvedDecodeOptions, ResolvedEncodeOptions } from './types'
 import { DEFAULT_DELIMITER } from './constants'
 import { decodeValueFromLines } from './decode/decoders'
+import { expandPathsSafe } from './decode/expand'
 import { LineCursor, toParsedLines } from './decode/scanner'
 import { encodeValue } from './encode/encoders'
 import { normalizeValue } from './encode/normalize'
@@ -34,7 +35,14 @@ export function decode(input: string, options?: DecodeOptions): JsonValue {
   }
 
   const cursor = new LineCursor(scanResult.lines, scanResult.blankLines)
-  return decodeValueFromLines(cursor, resolvedOptions)
+  const value = decodeValueFromLines(cursor, resolvedOptions)
+
+  // Apply path expansion if enabled
+  if (resolvedOptions.expandPaths === 'safe') {
+    return expandPathsSafe(value, resolvedOptions.strict)
+  }
+
+  return value
 }
 
 function resolveOptions(options?: EncodeOptions): ResolvedEncodeOptions {
@@ -42,6 +50,8 @@ function resolveOptions(options?: EncodeOptions): ResolvedEncodeOptions {
     indent: options?.indent ?? 2,
     delimiter: options?.delimiter ?? DEFAULT_DELIMITER,
     lengthMarker: options?.lengthMarker ?? false,
+    keyFolding: options?.keyFolding ?? 'off',
+    flattenDepth: options?.flattenDepth ?? Number.POSITIVE_INFINITY,
   }
 }
 
@@ -49,5 +59,6 @@ function resolveDecodeOptions(options?: DecodeOptions): ResolvedDecodeOptions {
   return {
     indent: options?.indent ?? 2,
     strict: options?.strict ?? true,
+    expandPaths: options?.expandPaths ?? 'off',
   }
 }

packages/toon/src/shared/validation.ts

@@ -12,6 +12,19 @@ export function isValidUnquotedKey(key: string): boolean {
   return /^[A-Z_][\w.]*$/i.test(key)
 }
 
+/**
+ * Checks if a key segment is a valid identifier for safe folding/expansion.
+ *
+ * @remarks
+ * Identifier segments are more restrictive than unquoted keys:
+ * - Must start with a letter or underscore
+ * - Followed only by letters, digits, or underscores (no dots)
+ * - Used for safe key folding and path expansion
+ */
+export function isIdentifierSegment(key: string): boolean {
+  return /^[A-Z_]\w*$/i.test(key)
+}
+
 /**
  * Determines if a string value can be safely encoded without quotes.
  *

packages/toon/src/types.ts

@@ -30,6 +30,20 @@ export interface EncodeOptions {
    * @default false
    */
   lengthMarker?: '#' | false
+  /**
+   * Enable key folding to collapse single-key wrapper chains.
+   * When set to 'safe', nested objects with single keys are collapsed into dotted paths
+   * (e.g., data.metadata.items instead of nested indentation).
+   * @default 'off'
+   */
+  keyFolding?: 'off' | 'safe'
+  /**
+   * Maximum number of segments to fold when keyFolding is enabled.
+   * Controls how deep the folding can go in single-key chains.
+   * Values 0 or 1 have no practical effect (treated as effectively disabled).
+   * @default Infinity
+   */
+  flattenDepth?: number
 }
 
 export type ResolvedEncodeOptions = Readonly<Required<EncodeOptions>>
@@ -49,6 +63,14 @@ export interface DecodeOptions {
    * @default true
    */
   strict?: boolean
+  /**
+   * Enable path expansion to reconstruct dotted keys into nested objects.
+   * When set to 'safe', keys containing dots are expanded into nested structures
+   * if all segments are valid identifiers (e.g., data.metadata.items becomes nested objects).
+   * Pairs with keyFolding='safe' for lossless round-trips.
+   * @default 'off'
+   */
+  expandPaths?: 'off' | 'safe'
 }
 
 export type ResolvedDecodeOptions = Readonly<Required<DecodeOptions>>

packages/toon/test/decode.test.ts

@@ -7,6 +7,7 @@ import delimiters from '@toon-format/spec/tests/fixtures/decode/delimiters.json'
 import indentationErrors from '@toon-format/spec/tests/fixtures/decode/indentation-errors.json'
 import numbers from '@toon-format/spec/tests/fixtures/decode/numbers.json'
 import objects from '@toon-format/spec/tests/fixtures/decode/objects.json'
+import pathExpansion from '@toon-format/spec/tests/fixtures/decode/path-expansion.json'
 import primitives from '@toon-format/spec/tests/fixtures/decode/primitives.json'
 import rootForm from '@toon-format/spec/tests/fixtures/decode/root-form.json'
 import validationErrors from '@toon-format/spec/tests/fixtures/decode/validation-errors.json'
@@ -21,6 +22,7 @@ const fixtureFiles = [
   arraysPrimitive,
   arraysTabular,
   arraysNested,
+  pathExpansion,
   delimiters,
   whitespace,
   rootForm,

packages/toon/test/encode.test.ts

@@ -5,6 +5,7 @@ import arraysObjects from '@toon-format/spec/tests/fixtures/encode/arrays-object
 import arraysPrimitive from '@toon-format/spec/tests/fixtures/encode/arrays-primitive.json'
 import arraysTabular from '@toon-format/spec/tests/fixtures/encode/arrays-tabular.json'
 import delimiters from '@toon-format/spec/tests/fixtures/encode/delimiters.json'
+import keyFolding from '@toon-format/spec/tests/fixtures/encode/key-folding.json'
 import objects from '@toon-format/spec/tests/fixtures/encode/objects.json'
 import options from '@toon-format/spec/tests/fixtures/encode/options.json'
 import primitives from '@toon-format/spec/tests/fixtures/encode/primitives.json'
@@ -19,6 +20,7 @@ const fixtureFiles = [
   arraysTabular,
   arraysNested,
   arraysObjects,
+  keyFolding,
   delimiters,
   whitespace,
   options,
@@ -48,5 +50,7 @@ function resolveEncodeOptions(options?: TestCase['options']): ResolvedEncodeOpti
     indent: options?.indent ?? 2,
     delimiter: options?.delimiter ?? DEFAULT_DELIMITER,
     lengthMarker: options?.lengthMarker === '#' ? '#' : false,
+    keyFolding: options?.keyFolding ?? 'off',
+    flattenDepth: options?.flattenDepth ?? Number.POSITIVE_INFINITY,
   }
 }

packages/toon/test/types.ts

@@ -13,8 +13,11 @@ export interface TestCase {
   options?: {
     delimiter?: ',' | '\t' | '|'
     indent?: number
-    lengthMarker?: '#' | ''
+    lengthMarker?: '#'
     strict?: boolean
+    keyFolding?: 'off' | 'safe'
+    flattenDepth?: number
+    expandPaths?: 'off' | 'safe'
   }
   specSection?: string
   note?: string