diff --git a/completions/mcpctl.bash b/completions/mcpctl.bash
index f35cb50..4c89749 100644
--- a/completions/mcpctl.bash
+++ b/completions/mcpctl.bash
@@ -5,7 +5,7 @@ _mcpctl() {
   local cur prev words cword
   _init_completion || return
 
-  local commands="status login logout config get describe delete logs create edit apply patch backup restore approve console"
+  local commands="status login logout config get describe delete logs create edit apply patch backup restore approve console cache"
   local project_commands="get describe delete logs create edit attach-server detach-server"
   local global_opts="-v --version --daemon-url --direct -p --project -h --help"
   local resources="servers instances secrets templates projects users groups rbac prompts promptrequests serverattachments proxymodels all"
@@ -185,7 +185,7 @@ _mcpctl() {
             COMPREPLY=($(compgen -W "--data --force -h --help" -- "$cur"))
             ;;
           project)
-            COMPREPLY=($(compgen -W "-d --description --proxy-mode --proxy-model --prompt --gated --no-gated --server --force -h --help" -- "$cur"))
+            COMPREPLY=($(compgen -W "-d --description --proxy-model --prompt --gated --no-gated --server --force -h --help" -- "$cur"))
             ;;
           user)
             COMPREPLY=($(compgen -W "--password --name --force -h --help" -- "$cur"))
@@ -281,6 +281,24 @@ _mcpctl() {
         COMPREPLY=($(compgen -W "--stdin-mcp --audit -h --help" -- "$cur"))
       fi
       return ;;
+    cache)
+      local cache_sub=$(_mcpctl_get_subcmd $subcmd_pos)
+      if [[ -z "$cache_sub" ]]; then
+        COMPREPLY=($(compgen -W "stats clear help" -- "$cur"))
+      else
+        case "$cache_sub" in
+          stats)
+            COMPREPLY=($(compgen -W "-h --help" -- "$cur"))
+            ;;
+          clear)
+            COMPREPLY=($(compgen -W "--older-than -y --yes -h --help" -- "$cur"))
+            ;;
+          *)
+            COMPREPLY=($(compgen -W "-h --help" -- "$cur"))
+            ;;
+        esac
+      fi
+      return ;;
     help)
       COMPREPLY=($(compgen -W "$commands" -- "$cur"))
       return ;;
diff --git a/completions/mcpctl.fish b/completions/mcpctl.fish
index 0a6334f..96ec444 100644
--- a/completions/mcpctl.fish
+++ b/completions/mcpctl.fish
@@ -4,7 +4,7 @@
 # Erase any stale completions from previous versions
 complete -c mcpctl -e
 
-set -l commands status login logout config get describe delete logs create edit apply patch backup restore approve console
+set -l commands status login logout config get describe delete logs create edit apply patch backup restore approve console cache
 set -l project_commands get describe delete logs create edit attach-server detach-server
 
 # Disable file completions by default
@@ -231,6 +231,7 @@ complete -c mcpctl -n "not __mcpctl_has_project; and not __fish_seen_subcommand_
 complete -c mcpctl -n "not __mcpctl_has_project; and not __fish_seen_subcommand_from $commands" -a restore -d 'Restore mcpctl configuration from a backup file'
 complete -c mcpctl -n "not __mcpctl_has_project; and not __fish_seen_subcommand_from $commands" -a approve -d 'Approve a pending prompt request (atomic: delete request, create prompt)'
 complete -c mcpctl -n "not __mcpctl_has_project; and not __fish_seen_subcommand_from $commands" -a console -d 'Interactive MCP console — unified timeline with tools, provenance, and lab replay'
+complete -c mcpctl -n "not __mcpctl_has_project; and not __fish_seen_subcommand_from $commands" -a cache -d 'Manage ProxyModel pipeline cache'
 
 # Project-scoped commands (with --project)
 complete -c mcpctl -n "__mcpctl_has_project; and not __fish_seen_subcommand_from $project_commands" -a get -d 'List resources (servers, projects, instances, all)'
@@ -313,7 +314,6 @@ complete -c mcpctl -n "__mcpctl_subcmd_active create secret" -l force -d 'Update
 
 # create project options
 complete -c mcpctl -n "__mcpctl_subcmd_active create project" -s d -l description -d 'Project description' -x
-complete -c mcpctl -n "__mcpctl_subcmd_active create project" -l proxy-mode -d 'Proxy mode (direct, filtered)' -x
 complete -c mcpctl -n "__mcpctl_subcmd_active create project" -l proxy-model -d 'Plugin name (default, content-pipeline, gate, none)' -x
 complete -c mcpctl -n "__mcpctl_subcmd_active create project" -l prompt -d 'Project-level prompt / instructions for the LLM' -x
 complete -c mcpctl -n "__mcpctl_subcmd_active create project" -l gated -d '[deprecated: use --proxy-model default]'
@@ -353,6 +353,15 @@ complete -c mcpctl -n "__mcpctl_subcmd_active create promptrequest" -l content -
 complete -c mcpctl -n "__mcpctl_subcmd_active create promptrequest" -l content-file -d 'Read prompt content from file' -rF
 complete -c mcpctl -n "__mcpctl_subcmd_active create promptrequest" -l priority -d 'Priority 1-10 (default: 5, higher = more important)' -x
 
+# cache subcommands
+set -l cache_cmds stats clear
+complete -c mcpctl -n "__fish_seen_subcommand_from cache; and not __fish_seen_subcommand_from $cache_cmds" -a stats -d 'Show cache statistics'
+complete -c mcpctl -n "__fish_seen_subcommand_from cache; and not __fish_seen_subcommand_from $cache_cmds" -a clear -d 'Clear cache entries'
+
+# cache clear options
+complete -c mcpctl -n "__mcpctl_subcmd_active cache clear" -l older-than -d 'Clear entries older than N days' -x
+complete -c mcpctl -n "__mcpctl_subcmd_active cache clear" -s y -l yes -d 'Skip confirmation'
+
 # status options
 complete -c mcpctl -n "__fish_seen_subcommand_from status" -s o -l output -d 'output format (table, json, yaml)' -x
 
diff --git a/src/cli/src/commands/apply.ts b/src/cli/src/commands/apply.ts
index 137fe92..973157d 100644
--- a/src/cli/src/commands/apply.ts
+++ b/src/cli/src/commands/apply.ts
@@ -125,7 +125,6 @@ const ProjectSpecSchema = z.object({
   name: z.string().min(1),
   description: z.string().default(''),
   prompt: z.string().max(10000).default(''),
-  proxyMode: z.enum(['direct', 'filtered']).default('direct'),
   proxyModel: z.string().optional(),
   gated: z.boolean().optional(),
   llmProvider: z.string().optional(),
diff --git a/src/cli/src/commands/create.ts b/src/cli/src/commands/create.ts
index 2327c86..7954884 100644
--- a/src/cli/src/commands/create.ts
+++ b/src/cli/src/commands/create.ts
@@ -225,7 +225,6 @@ export function createCreateCommand(deps: CreateCommandDeps): Command {
     .description('Create a project')
     .argument('<name>', 'Project name')
     .option('-d, --description <text>', 'Project description', '')
-    .option('--proxy-mode <mode>', 'Proxy mode (direct, filtered)')
     .option('--proxy-model <name>', 'Plugin name (default, content-pipeline, gate, none)')
     .option('--prompt <text>', 'Project-level prompt / instructions for the LLM')
     .option('--gated', '[deprecated: use --proxy-model default]')
@@ -236,7 +235,6 @@ export function createCreateCommand(deps: CreateCommandDeps): Command {
       const body: Record<string, unknown> = {
         name,
         description: opts.description,
-        proxyMode: opts.proxyMode ?? 'direct',
       };
       if (opts.prompt) body.prompt = opts.prompt;
       if (opts.proxyModel) {
diff --git a/src/cli/src/commands/describe.ts b/src/cli/src/commands/describe.ts
index 887dbeb..9fc1d24 100644
--- a/src/cli/src/commands/describe.ts
+++ b/src/cli/src/commands/describe.ts
@@ -143,8 +143,7 @@ function formatProjectDetail(
   lines.push(`${pad('Name:')}${project.name}`);
   if (project.description) lines.push(`${pad('Description:')}${project.description}`);
 
-  // Plugin & proxy config
-  const proxyMode = project.proxyMode as string | undefined;
+  // Plugin config
   const proxyModel = (project.proxyModel as string | undefined) || 'default';
   const llmProvider = project.llmProvider as string | undefined;
   const llmModel = project.llmModel as string | undefined;
@@ -152,7 +151,6 @@ function formatProjectDetail(
   lines.push('');
   lines.push('Plugin Config:');
   lines.push(`  ${pad('Plugin:', 18)}${proxyModel}`);
-  lines.push(`  ${pad('Mode:', 18)}${proxyMode ?? 'direct'}`);
   if (llmProvider) lines.push(`  ${pad('LLM Provider:', 18)}${llmProvider}`);
   if (llmModel) lines.push(`  ${pad('LLM Model:', 18)}${llmModel}`);
 
diff --git a/src/cli/src/commands/get.ts b/src/cli/src/commands/get.ts
index f22609c..af82a06 100644
--- a/src/cli/src/commands/get.ts
+++ b/src/cli/src/commands/get.ts
@@ -23,7 +23,6 @@ interface ProjectRow {
   id: string;
   name: string;
   description: string;
-  proxyMode: string;
   proxyModel: string;
   gated?: boolean;
   ownerId: string;
@@ -86,7 +85,6 @@ interface RbacRow {
 
 const projectColumns: Column<ProjectRow>[] = [
   { header: 'NAME', key: 'name' },
-  { header: 'MODE', key: (r) => r.proxyMode ?? 'direct', width: 10 },
   { header: 'PLUGIN', key: (r) => r.proxyModel || 'default', width: 18 },
   { header: 'SERVERS', key: (r) => r.servers ? String(r.servers.length) : '0', width: 8 },
   { header: 'DESCRIPTION', key: 'description', width: 30 },
diff --git a/src/cli/tests/commands/apply.test.ts b/src/cli/tests/commands/apply.test.ts
index b12ae87..962700d 100644
--- a/src/cli/tests/commands/apply.test.ts
+++ b/src/cli/tests/commands/apply.test.ts
@@ -332,7 +332,6 @@ rbacBindings:
 projects:
   - name: smart-home
     description: Home automation
-    proxyMode: filtered
     llmProvider: gemini-cli
     llmModel: gemini-2.0-flash
     servers:
@@ -345,7 +344,6 @@ projects:
 
     expect(client.post).toHaveBeenCalledWith('/api/v1/projects', expect.objectContaining({
       name: 'smart-home',
-      proxyMode: 'filtered',
       llmProvider: 'gemini-cli',
       llmModel: 'gemini-2.0-flash',
       servers: ['my-grafana', 'my-ha'],
diff --git a/src/cli/tests/commands/create.test.ts b/src/cli/tests/commands/create.test.ts
index 081d6ce..fe8eb0f 100644
--- a/src/cli/tests/commands/create.test.ts
+++ b/src/cli/tests/commands/create.test.ts
@@ -175,7 +175,6 @@ describe('create command', () => {
       expect(client.post).toHaveBeenCalledWith('/api/v1/projects', {
         name: 'my-project',
         description: 'A test project',
-        proxyMode: 'direct',
       });
       expect(output.join('\n')).toContain("project 'test' created");
     });
@@ -186,7 +185,6 @@ describe('create command', () => {
       expect(client.post).toHaveBeenCalledWith('/api/v1/projects', {
         name: 'minimal',
         description: '',
-        proxyMode: 'direct',
       });
     });
 
@@ -195,7 +193,7 @@ describe('create command', () => {
       vi.mocked(client.get).mockResolvedValueOnce([{ id: 'proj-1', name: 'my-proj' }] as never);
       const cmd = createCreateCommand({ client, log });
       await cmd.parseAsync(['project', 'my-proj', '-d', 'updated', '--force'], { from: 'user' });
-      expect(client.put).toHaveBeenCalledWith('/api/v1/projects/proj-1', { description: 'updated', proxyMode: 'direct' });
+      expect(client.put).toHaveBeenCalledWith('/api/v1/projects/proj-1', { description: 'updated' });
       expect(output.join('\n')).toContain("project 'my-proj' updated");
     });
   });
diff --git a/src/cli/tests/commands/describe.test.ts b/src/cli/tests/commands/describe.test.ts
index e1d6e68..979ddba 100644
--- a/src/cli/tests/commands/describe.test.ts
+++ b/src/cli/tests/commands/describe.test.ts
@@ -96,7 +96,6 @@ describe('describe command', () => {
       description: 'A gated project',
       ownerId: 'user-1',
       proxyModel: 'default',
-      proxyMode: 'direct',
       createdAt: '2025-01-01',
     });
     const cmd = createDescribeCommand(deps);
diff --git a/src/cli/tests/commands/get.test.ts b/src/cli/tests/commands/get.test.ts
index 71865a6..23912df 100644
--- a/src/cli/tests/commands/get.test.ts
+++ b/src/cli/tests/commands/get.test.ts
@@ -179,7 +179,6 @@ describe('get command', () => {
       id: 'proj-1',
       name: 'smart-home',
       description: 'Home automation',
-      proxyMode: 'filtered',
       ownerId: 'usr-1',
       servers: [{ server: { name: 'grafana' } }],
     }]);
@@ -187,10 +186,8 @@ describe('get command', () => {
     await cmd.parseAsync(['node', 'test', 'projects']);
 
     const text = deps.output.join('\n');
-    expect(text).toContain('MODE');
     expect(text).toContain('SERVERS');
     expect(text).toContain('smart-home');
-    expect(text).toContain('filtered');
     expect(text).toContain('1');
   });
 
@@ -341,7 +338,6 @@ describe('get command', () => {
       id: 'proj-1',
       name: 'home',
       description: '',
-      proxyMode: 'direct',
       proxyModel: '',
       gated: true,
       ownerId: 'usr-1',
@@ -362,7 +358,6 @@ describe('get command', () => {
       id: 'proj-1',
       name: 'home',
       description: '',
-      proxyMode: 'direct',
       proxyModel: '',
       gated: true,
       ownerId: 'usr-1',
@@ -381,7 +376,6 @@ describe('get command', () => {
       id: 'proj-1',
       name: 'tools',
       description: '',
-      proxyMode: 'direct',
       proxyModel: '',
       gated: false,
       ownerId: 'usr-1',
@@ -400,7 +394,6 @@ describe('get command', () => {
       id: 'proj-1',
       name: 'custom',
       description: '',
-      proxyMode: 'direct',
       proxyModel: 'gate',
       gated: true,
       ownerId: 'usr-1',
diff --git a/src/cli/tests/commands/project.test.ts b/src/cli/tests/commands/project.test.ts
index b6713a9..f09a771 100644
--- a/src/cli/tests/commands/project.test.ts
+++ b/src/cli/tests/commands/project.test.ts
@@ -24,12 +24,11 @@ describe('project with new fields', () => {
   });
 
   describe('create project with enhanced options', () => {
-    it('creates project with proxy mode and servers', async () => {
+    it('creates project with servers', async () => {
       const cmd = createCreateCommand({ client, log });
       await cmd.parseAsync([
         'project', 'smart-home',
         '-d', 'Smart home project',
-        '--proxy-mode', 'filtered',
         '--server', 'my-grafana',
         '--server', 'my-ha',
       ], { from: 'user' });
@@ -37,30 +36,19 @@ describe('project with new fields', () => {
       expect(client.post).toHaveBeenCalledWith('/api/v1/projects', expect.objectContaining({
         name: 'smart-home',
         description: 'Smart home project',
-        proxyMode: 'filtered',
         servers: ['my-grafana', 'my-ha'],
       }));
     });
-
-    it('defaults proxy mode to direct', async () => {
-      const cmd = createCreateCommand({ client, log });
-      await cmd.parseAsync(['project', 'basic'], { from: 'user' });
-
-      expect(client.post).toHaveBeenCalledWith('/api/v1/projects', expect.objectContaining({
-        proxyMode: 'direct',
-      }));
-    });
   });
 
   describe('get projects shows new columns', () => {
-    it('shows MODE and SERVERS columns', async () => {
+    it('shows SERVERS column', async () => {
       const deps = {
         output: [] as string[],
         fetchResource: vi.fn(async () => [{
           id: 'proj-1',
           name: 'smart-home',
           description: 'Test',
-          proxyMode: 'filtered',
           ownerId: 'user-1',
           servers: [{ server: { name: 'grafana' } }, { server: { name: 'ha' } }],
         }]),
@@ -70,14 +58,13 @@ describe('project with new fields', () => {
       await cmd.parseAsync(['node', 'test', 'projects']);
 
       const text = deps.output.join('\n');
-      expect(text).toContain('MODE');
       expect(text).toContain('SERVERS');
       expect(text).toContain('smart-home');
     });
   });
 
   describe('describe project shows full detail', () => {
-    it('shows servers and proxy config', async () => {
+    it('shows servers and LLM config', async () => {
       const deps = {
         output: [] as string[],
         client: mockClient(),
@@ -85,7 +72,6 @@ describe('project with new fields', () => {
           id: 'proj-1',
           name: 'smart-home',
           description: 'Smart home',
-          proxyMode: 'filtered',
           llmProvider: 'gemini-cli',
           llmModel: 'gemini-2.0-flash',
           ownerId: 'user-1',
@@ -103,7 +89,6 @@ describe('project with new fields', () => {
 
       const text = deps.output.join('\n');
       expect(text).toContain('=== Project: smart-home ===');
-      expect(text).toContain('filtered');
       expect(text).toContain('gemini-cli');
       expect(text).toContain('my-grafana');
       expect(text).toContain('my-ha');
diff --git a/src/db/prisma/migrations/20260307120000_remove_proxy_mode/migration.sql b/src/db/prisma/migrations/20260307120000_remove_proxy_mode/migration.sql
new file mode 100644
index 0000000..d2088b9
--- /dev/null
+++ b/src/db/prisma/migrations/20260307120000_remove_proxy_mode/migration.sql
@@ -0,0 +1,2 @@
+-- Remove proxyMode column (redundant — all traffic goes through mcplocal proxy)
+ALTER TABLE "Project" DROP COLUMN IF EXISTS "proxyMode";
diff --git a/src/db/prisma/schema.prisma b/src/db/prisma/schema.prisma
index 6e49e61..e12acff 100644
--- a/src/db/prisma/schema.prisma
+++ b/src/db/prisma/schema.prisma
@@ -173,7 +173,6 @@ model Project {
   name        String   @unique
   description String   @default("")
   prompt      String   @default("")
-  proxyMode   String   @default("direct")
   proxyModel  String   @default("")
   gated       Boolean  @default(true)
   llmProvider     String?
diff --git a/src/db/tests/models.test.ts b/src/db/tests/models.test.ts
index 6915cad..dbedd36 100644
--- a/src/db/tests/models.test.ts
+++ b/src/db/tests/models.test.ts
@@ -506,23 +506,16 @@ describe('ProjectServer', () => {
 // ── Project new fields ──
 
 describe('Project new fields', () => {
-  it('defaults proxyMode to direct', async () => {
-    const project = await createProject();
-    expect(project.proxyMode).toBe('direct');
-  });
-
-  it('stores proxyMode, llmProvider, llmModel', async () => {
+  it('stores llmProvider, llmModel', async () => {
     const user = await createUser();
     const project = await prisma.project.create({
       data: {
         name: 'filtered-project',
         ownerId: user.id,
-        proxyMode: 'filtered',
         llmProvider: 'gemini-cli',
         llmModel: 'gemini-2.0-flash',
       },
     });
-    expect(project.proxyMode).toBe('filtered');
     expect(project.llmProvider).toBe('gemini-cli');
     expect(project.llmModel).toBe('gemini-2.0-flash');
   });
diff --git a/src/mcpd/src/bootstrap/system-project.ts b/src/mcpd/src/bootstrap/system-project.ts
index 5530490..27b08d9 100644
--- a/src/mcpd/src/bootstrap/system-project.ts
+++ b/src/mcpd/src/bootstrap/system-project.ts
@@ -144,7 +144,6 @@ export async function bootstrapSystemProject(prisma: PrismaClient): Promise<void
       name: SYSTEM_PROJECT_NAME,
       description: 'System prompts for mcpctl gating and session management',
       prompt: '',
-      proxyMode: 'direct',
       gated: false,
       ownerId: systemUser.id,
     },
diff --git a/src/mcpd/src/main.ts b/src/mcpd/src/main.ts
index 547c369..e8170bd 100644
--- a/src/mcpd/src/main.ts
+++ b/src/mcpd/src/main.ts
@@ -276,7 +276,7 @@ async function main(): Promise<void> {
   const instanceService = new InstanceService(instanceRepo, serverRepo, orchestrator, secretRepo);
   serverService.setInstanceService(instanceService);
   const secretService = new SecretService(secretRepo);
-  const projectService = new ProjectService(projectRepo, serverRepo, secretRepo);
+  const projectService = new ProjectService(projectRepo, serverRepo);
   const auditLogService = new AuditLogService(auditLogRepo);
   const auditEventService = new AuditEventService(auditEventRepo);
   const metricsCollector = new MetricsCollector();
diff --git a/src/mcpd/src/repositories/project.repository.ts b/src/mcpd/src/repositories/project.repository.ts
index 343d046..fd086fd 100644
--- a/src/mcpd/src/repositories/project.repository.ts
+++ b/src/mcpd/src/repositories/project.repository.ts
@@ -12,7 +12,7 @@ export interface IProjectRepository {
   findAll(ownerId?: string): Promise<ProjectWithRelations[]>;
   findById(id: string): Promise<ProjectWithRelations | null>;
   findByName(name: string): Promise<ProjectWithRelations | null>;
-  create(data: { name: string; description: string; prompt?: string; ownerId: string; proxyMode: string; proxyModel?: string; gated?: boolean; llmProvider?: string; llmModel?: string; serverOverrides?: Record<string, unknown> }): Promise<ProjectWithRelations>;
+  create(data: { name: string; description: string; prompt?: string; ownerId: string; proxyModel?: string; gated?: boolean; llmProvider?: string; llmModel?: string; serverOverrides?: Record<string, unknown> }): Promise<ProjectWithRelations>;
   update(id: string, data: Record<string, unknown>): Promise<ProjectWithRelations>;
   delete(id: string): Promise<void>;
   setServers(projectId: string, serverIds: string[]): Promise<void>;
@@ -36,12 +36,11 @@ export class ProjectRepository implements IProjectRepository {
     return this.prisma.project.findUnique({ where: { name }, include: PROJECT_INCLUDE }) as unknown as Promise<ProjectWithRelations | null>;
   }
 
-  async create(data: { name: string; description: string; prompt?: string; ownerId: string; proxyMode: string; proxyModel?: string; gated?: boolean; llmProvider?: string; llmModel?: string; serverOverrides?: Record<string, unknown> }): Promise<ProjectWithRelations> {
+  async create(data: { name: string; description: string; prompt?: string; ownerId: string; proxyModel?: string; gated?: boolean; llmProvider?: string; llmModel?: string; serverOverrides?: Record<string, unknown> }): Promise<ProjectWithRelations> {
     const createData: Record<string, unknown> = {
       name: data.name,
       description: data.description,
       ownerId: data.ownerId,
-      proxyMode: data.proxyMode,
     };
     if (data.prompt !== undefined) createData['prompt'] = data.prompt;
     if (data.proxyModel !== undefined) createData['proxyModel'] = data.proxyModel;
diff --git a/src/mcpd/src/services/backup/backup-service.ts b/src/mcpd/src/services/backup/backup-service.ts
index 6ee0db6..c4a468a 100644
--- a/src/mcpd/src/services/backup/backup-service.ts
+++ b/src/mcpd/src/services/backup/backup-service.ts
@@ -116,7 +116,6 @@ export class BackupService {
       projects = allProjects.map((proj) => ({
         name: proj.name,
         description: proj.description,
-        proxyMode: proj.proxyMode,
         proxyModel: proj.proxyModel,
         llmProvider: proj.llmProvider,
         llmModel: proj.llmModel,
diff --git a/src/mcpd/src/services/backup/restore-service.ts b/src/mcpd/src/services/backup/restore-service.ts
index 3ba1639..a1b82cb 100644
--- a/src/mcpd/src/services/backup/restore-service.ts
+++ b/src/mcpd/src/services/backup/restore-service.ts
@@ -255,7 +255,6 @@ export class RestoreService {
           }
           // overwrite
           const updateData: Record<string, unknown> = { description: project.description };
-          if (project.proxyMode) updateData['proxyMode'] = project.proxyMode;
           if (project.proxyModel) updateData['proxyModel'] = project.proxyModel;
           if (project.llmProvider !== undefined) updateData['llmProvider'] = project.llmProvider;
           if (project.llmModel !== undefined) updateData['llmModel'] = project.llmModel;
@@ -271,11 +270,10 @@ export class RestoreService {
           continue;
         }
 
-        const projectCreateData: { name: string; description: string; ownerId: string; proxyMode: string; proxyModel?: string; llmProvider?: string; llmModel?: string } = {
+        const projectCreateData: { name: string; description: string; ownerId: string; proxyModel?: string; llmProvider?: string; llmModel?: string } = {
           name: project.name,
           description: project.description,
           ownerId: 'system',
-          proxyMode: project.proxyMode ?? 'direct',
         };
         if (project.proxyModel) projectCreateData.proxyModel = project.proxyModel;
         if (project.llmProvider != null) projectCreateData.llmProvider = project.llmProvider;
diff --git a/src/mcpd/src/services/project.service.ts b/src/mcpd/src/services/project.service.ts
index fce11da..b464e44 100644
--- a/src/mcpd/src/services/project.service.ts
+++ b/src/mcpd/src/services/project.service.ts
@@ -1,17 +1,13 @@
-import type { McpServer } from '@prisma/client';
 import type { IProjectRepository, ProjectWithRelations } from '../repositories/project.repository.js';
-import type { IMcpServerRepository, ISecretRepository } from '../repositories/interfaces.js';
+import type { IMcpServerRepository } from '../repositories/interfaces.js';
 import { CreateProjectSchema, UpdateProjectSchema } from '../validation/project.schema.js';
 import { NotFoundError, ConflictError } from './mcp-server.service.js';
-import { resolveServerEnv } from './env-resolver.js';
-import { generateMcpConfig } from './mcp-config-generator.js';
 import type { McpConfig } from './mcp-config-generator.js';
 
 export class ProjectService {
   constructor(
     private readonly projectRepo: IProjectRepository,
     private readonly serverRepo: IMcpServerRepository,
-    private readonly secretRepo: ISecretRepository,
   ) {}
 
   async list(ownerId?: string): Promise<ProjectWithRelations[]> {
@@ -55,7 +51,6 @@ export class ProjectService {
       description: data.description,
       prompt: data.prompt,
       ownerId,
-      proxyMode: data.proxyMode,
       proxyModel: data.proxyModel,
       gated: data.gated,
       ...(data.llmProvider !== undefined ? { llmProvider: data.llmProvider } : {}),
@@ -80,7 +75,6 @@ export class ProjectService {
     const updateData: Record<string, unknown> = {};
     if (data.description !== undefined) updateData['description'] = data.description;
     if (data.prompt !== undefined) updateData['prompt'] = data.prompt;
-    if (data.proxyMode !== undefined) updateData['proxyMode'] = data.proxyMode;
     if (data.proxyModel !== undefined) updateData['proxyModel'] = data.proxyModel;
     if (data.llmProvider !== undefined) updateData['llmProvider'] = data.llmProvider;
     if (data.llmModel !== undefined) updateData['llmModel'] = data.llmModel;
@@ -110,29 +104,14 @@ export class ProjectService {
   async generateMcpConfig(idOrName: string): Promise<McpConfig> {
     const project = await this.resolveAndGet(idOrName);
 
-    if (project.proxyMode === 'filtered') {
-      // Single entry pointing at mcplocal proxy
-      return {
-        mcpServers: {
-          [project.name]: {
-            url: `http://localhost:3100/api/v1/mcp/proxy/project/${project.name}`,
-          },
+    // All traffic goes through mcplocal proxy — single entry
+    return {
+      mcpServers: {
+        [project.name]: {
+          url: `http://localhost:3100/api/v1/mcp/proxy/project/${project.name}`,
         },
-      };
-    }
-
-    // Direct mode: fetch full servers and resolve env
-    const serverEntries: Array<{ server: McpServer; resolvedEnv: Record<string, string> }> = [];
-
-    for (const ps of project.servers) {
-      const server = await this.serverRepo.findById(ps.server.id);
-      if (server === null) continue;
-
-      const resolvedEnv = await resolveServerEnv(server, this.secretRepo);
-      serverEntries.push({ server, resolvedEnv });
-    }
-
-    return generateMcpConfig(serverEntries);
+      },
+    };
   }
 
   async addServer(idOrName: string, serverName: string): Promise<ProjectWithRelations> {
diff --git a/src/mcpd/src/validation/project.schema.ts b/src/mcpd/src/validation/project.schema.ts
index b355d38..382a2d6 100644
--- a/src/mcpd/src/validation/project.schema.ts
+++ b/src/mcpd/src/validation/project.schema.ts
@@ -4,7 +4,6 @@ export const CreateProjectSchema = z.object({
   name: z.string().min(1).max(100).regex(/^[a-z0-9-]+$/, 'Name must be lowercase alphanumeric with hyphens'),
   description: z.string().max(1000).default(''),
   prompt: z.string().max(10000).default(''),
-  proxyMode: z.enum(['direct', 'filtered']).default('direct'),
   proxyModel: z.string().max(100).default(''),
   gated: z.boolean().default(true),
   llmProvider: z.string().max(100).optional(),
@@ -13,15 +12,13 @@ export const CreateProjectSchema = z.object({
   serverOverrides: z.record(z.string(), z.object({
     proxyModel: z.string().optional(),
   })).optional(),
-}).refine(
-  (d) => d.proxyMode !== 'filtered' || d.llmProvider,
-  { message: 'llmProvider is required when proxyMode is "filtered"' },
-);
+  // Backward compat: accept but ignore proxyMode from old configs
+  proxyMode: z.string().optional(),
+}).transform(({ proxyMode: _ignored, ...rest }) => rest);
 
 export const UpdateProjectSchema = z.object({
   description: z.string().max(1000).optional(),
   prompt: z.string().max(10000).optional(),
-  proxyMode: z.enum(['direct', 'filtered']).optional(),
   proxyModel: z.string().max(100).optional(),
   gated: z.boolean().optional(),
   llmProvider: z.string().max(100).nullable().optional(),
@@ -30,7 +27,9 @@ export const UpdateProjectSchema = z.object({
   serverOverrides: z.record(z.string(), z.object({
     proxyModel: z.string().optional(),
   })).optional(),
-});
+  // Backward compat: accept but ignore proxyMode from old configs
+  proxyMode: z.string().optional(),
+}).transform(({ proxyMode: _ignored, ...rest }) => rest);
 
 export type CreateProjectInput = z.infer<typeof CreateProjectSchema>;
 export type UpdateProjectInput = z.infer<typeof UpdateProjectSchema>;
diff --git a/src/mcpd/tests/backup.test.ts b/src/mcpd/tests/backup.test.ts
index 9b08060..3ea1553 100644
--- a/src/mcpd/tests/backup.test.ts
+++ b/src/mcpd/tests/backup.test.ts
@@ -34,7 +34,7 @@ const mockSecrets = [
 
 const mockProjects = [
   {
-    id: 'proj1', name: 'my-project', description: 'Test project', proxyMode: 'direct', proxyModel: '', llmProvider: null, llmModel: null,
+    id: 'proj1', name: 'my-project', description: 'Test project', proxyModel: '', llmProvider: null, llmModel: null,
     ownerId: 'user1', version: 1, createdAt: new Date(), updatedAt: new Date(),
     servers: [{ id: 'ps1', server: { id: 's1', name: 'github' } }],
   },
@@ -217,7 +217,6 @@ describe('BackupService', () => {
   it('includes enriched projects with server names', async () => {
     const bundle = await backupService.createBackup();
     const proj = bundle.projects[0]!;
-    expect(proj.proxyMode).toBe('direct');
     expect(proj.serverNames).toEqual(['github']);
   });
 
@@ -322,7 +321,7 @@ describe('RestoreService', () => {
       { name: 'admins', subjects: [{ kind: 'User', name: 'alice@test.com' }], roleBindings: [{ role: 'edit', resource: '*' }] },
     ],
     projects: [
-      { name: 'test-proj', description: 'Test', proxyMode: 'filtered', llmProvider: 'openai', llmModel: 'gpt-4', serverNames: ['github'], members: ['alice@test.com'] },
+      { name: 'test-proj', description: 'Test', llmProvider: 'openai', llmModel: 'gpt-4', serverNames: ['github'], members: ['alice@test.com'] },
     ],
   };
 
@@ -423,7 +422,6 @@ describe('RestoreService', () => {
     expect(result.projectsCreated).toBe(1);
     expect(projectRepo.create).toHaveBeenCalledWith(expect.objectContaining({
       name: 'test-proj',
-      proxyMode: 'filtered',
       llmProvider: 'openai',
       llmModel: 'gpt-4',
     }));
diff --git a/src/mcpd/tests/project-routes.test.ts b/src/mcpd/tests/project-routes.test.ts
index 438bac6..c21757e 100644
--- a/src/mcpd/tests/project-routes.test.ts
+++ b/src/mcpd/tests/project-routes.test.ts
@@ -5,7 +5,7 @@ import { registerProjectRoutes } from '../src/routes/projects.js';
 import { ProjectService } from '../src/services/project.service.js';
 import { errorHandler } from '../src/middleware/error-handler.js';
 import type { IProjectRepository, ProjectWithRelations } from '../src/repositories/project.repository.js';
-import type { IMcpServerRepository, ISecretRepository } from '../src/repositories/interfaces.js';
+import type { IMcpServerRepository } from '../src/repositories/interfaces.js';
 
 let app: FastifyInstance;
 
@@ -15,7 +15,6 @@ function makeProject(overrides: Partial<ProjectWithRelations> = {}): ProjectWith
     name: 'test-project',
     description: '',
     ownerId: 'user-1',
-    proxyMode: 'direct',
     prompt: '',
     proxyModel: '',
     gated: true,
@@ -39,7 +38,6 @@ function mockProjectRepo(): IProjectRepository {
       name: data.name,
       description: data.description,
       ownerId: data.ownerId,
-      proxyMode: data.proxyMode,
     })),
     update: vi.fn(async (_id, data) => makeProject({ ...data as Partial<ProjectWithRelations> })),
     delete: vi.fn(async () => {}),
@@ -60,17 +58,6 @@ function mockServerRepo(): IMcpServerRepository {
   };
 }
 
-function mockSecretRepo(): ISecretRepository {
-  return {
-    findAll: vi.fn(async () => []),
-    findById: vi.fn(async () => null),
-    findByName: vi.fn(async () => null),
-    create: vi.fn(async () => ({} as never)),
-    update: vi.fn(async () => ({} as never)),
-    delete: vi.fn(async () => {}),
-  };
-}
-
 afterEach(async () => {
   if (app) await app.close();
 });
@@ -78,7 +65,7 @@ afterEach(async () => {
 function createApp(projectRepo: IProjectRepository, serverRepo?: IMcpServerRepository) {
   app = Fastify({ logger: false });
   app.setErrorHandler(errorHandler);
-  const service = new ProjectService(projectRepo, serverRepo ?? mockServerRepo(), mockSecretRepo());
+  const service = new ProjectService(projectRepo, serverRepo ?? mockServerRepo());
   registerProjectRoutes(app, service);
   return app.ready();
 }
diff --git a/src/mcpd/tests/project-service.test.ts b/src/mcpd/tests/project-service.test.ts
index 5b697f8..d369256 100644
--- a/src/mcpd/tests/project-service.test.ts
+++ b/src/mcpd/tests/project-service.test.ts
@@ -2,7 +2,7 @@ import { describe, it, expect, vi, beforeEach } from 'vitest';
 import { ProjectService } from '../src/services/project.service.js';
 import { NotFoundError, ConflictError } from '../src/services/mcp-server.service.js';
 import type { IProjectRepository, ProjectWithRelations } from '../src/repositories/project.repository.js';
-import type { IMcpServerRepository, ISecretRepository } from '../src/repositories/interfaces.js';
+import type { IMcpServerRepository } from '../src/repositories/interfaces.js';
 import type { McpServer } from '@prisma/client';
 
 function makeProject(overrides: Partial<ProjectWithRelations> = {}): ProjectWithRelations {
@@ -11,7 +11,6 @@ function makeProject(overrides: Partial<ProjectWithRelations> = {}): ProjectWith
     name: 'test-project',
     description: '',
     ownerId: 'user-1',
-    proxyMode: 'direct',
     proxyModel: '',
     gated: true,
     llmProvider: null,
@@ -57,7 +56,6 @@ function mockProjectRepo(): IProjectRepository {
       name: data.name,
       description: data.description,
       ownerId: data.ownerId,
-      proxyMode: data.proxyMode,
       llmProvider: data.llmProvider ?? null,
       llmModel: data.llmModel ?? null,
     })),
@@ -80,28 +78,15 @@ function mockServerRepo(): IMcpServerRepository {
   };
 }
 
-function mockSecretRepo(): ISecretRepository {
-  return {
-    findAll: vi.fn(async () => []),
-    findById: vi.fn(async () => null),
-    findByName: vi.fn(async () => null),
-    create: vi.fn(async () => ({ id: 'sec-1', name: 'test', data: {}, version: 1, createdAt: new Date(), updatedAt: new Date() })),
-    update: vi.fn(async () => ({ id: 'sec-1', name: 'test', data: {}, version: 1, createdAt: new Date(), updatedAt: new Date() })),
-    delete: vi.fn(async () => {}),
-  };
-}
-
 describe('ProjectService', () => {
   let projectRepo: ReturnType<typeof mockProjectRepo>;
   let serverRepo: ReturnType<typeof mockServerRepo>;
-  let secretRepo: ReturnType<typeof mockSecretRepo>;
   let service: ProjectService;
 
   beforeEach(() => {
     projectRepo = mockProjectRepo();
     serverRepo = mockServerRepo();
-    secretRepo = mockSecretRepo();
-    service = new ProjectService(projectRepo, serverRepo, secretRepo);
+    service = new ProjectService(projectRepo, serverRepo);
   });
 
   describe('create', () => {
@@ -149,27 +134,6 @@ describe('ProjectService', () => {
       expect(result.servers).toHaveLength(2);
     });
 
-    it('creates project with proxyMode and llmProvider', async () => {
-      const created = makeProject({ id: 'proj-filtered', proxyMode: 'filtered', llmProvider: 'openai' });
-      vi.mocked(projectRepo.create).mockResolvedValue(created);
-      vi.mocked(projectRepo.findById).mockResolvedValue(created);
-
-      const result = await service.create({
-        name: 'filtered-proj',
-        proxyMode: 'filtered',
-        llmProvider: 'openai',
-      }, 'user-1');
-
-      expect(result.proxyMode).toBe('filtered');
-      expect(result.llmProvider).toBe('openai');
-    });
-
-    it('rejects filtered project without llmProvider', async () => {
-      await expect(
-        service.create({ name: 'bad-proj', proxyMode: 'filtered' }, 'user-1'),
-      ).rejects.toThrow();
-    });
-
     it('throws NotFoundError when server name resolution fails', async () => {
       vi.mocked(serverRepo.findByName).mockResolvedValue(null);
 
@@ -226,13 +190,12 @@ describe('ProjectService', () => {
       expect(projectRepo.setServers).toHaveBeenCalledWith('proj-1', ['srv-new']);
     });
 
-    it('updates proxyMode', async () => {
+    it('updates llmProvider', async () => {
       const existing = makeProject({ id: 'proj-1' });
       vi.mocked(projectRepo.findById).mockResolvedValue(existing);
 
-      await service.update('proj-1', { proxyMode: 'filtered', llmProvider: 'anthropic' });
+      await service.update('proj-1', { llmProvider: 'anthropic' });
       expect(projectRepo.update).toHaveBeenCalledWith('proj-1', {
-        proxyMode: 'filtered',
         llmProvider: 'anthropic',
       });
     });
@@ -297,46 +260,10 @@ describe('ProjectService', () => {
   });
 
   describe('generateMcpConfig', () => {
-    it('generates direct mode config with STDIO servers', async () => {
-      const srv = makeServer({ id: 'srv-1', name: 'github', packageName: '@mcp/github', transport: 'STDIO' });
+    it('generates single mcplocal proxy entry', async () => {
       const project = makeProject({
         id: 'proj-1',
         name: 'my-proj',
-        proxyMode: 'direct',
-        servers: [{ id: 'ps-1', server: { id: 'srv-1', name: 'github' } }],
-      });
-
-      vi.mocked(projectRepo.findById).mockResolvedValue(project);
-      vi.mocked(serverRepo.findById).mockResolvedValue(srv);
-
-      const config = await service.generateMcpConfig('proj-1');
-      expect(config.mcpServers['github']).toBeDefined();
-      expect(config.mcpServers['github']?.command).toBe('npx');
-      expect(config.mcpServers['github']?.args).toEqual(['-y', '@mcp/github']);
-    });
-
-    it('generates direct mode config with SSE servers (URL-based)', async () => {
-      const srv = makeServer({ id: 'srv-2', name: 'sse-server', transport: 'SSE' });
-      const project = makeProject({
-        id: 'proj-1',
-        proxyMode: 'direct',
-        servers: [{ id: 'ps-1', server: { id: 'srv-2', name: 'sse-server' } }],
-      });
-
-      vi.mocked(projectRepo.findById).mockResolvedValue(project);
-      vi.mocked(serverRepo.findById).mockResolvedValue(srv);
-
-      const config = await service.generateMcpConfig('proj-1');
-      expect(config.mcpServers['sse-server']?.url).toBe('http://localhost:3100/api/v1/mcp/proxy/sse-server');
-      expect(config.mcpServers['sse-server']?.command).toBeUndefined();
-    });
-
-    it('generates filtered mode config (single mcplocal entry)', async () => {
-      const project = makeProject({
-        id: 'proj-1',
-        name: 'filtered-proj',
-        proxyMode: 'filtered',
-        llmProvider: 'openai',
         servers: [{ id: 'ps-1', server: { id: 'srv-1', name: 'github' } }],
       });
 
@@ -344,14 +271,13 @@ describe('ProjectService', () => {
 
       const config = await service.generateMcpConfig('proj-1');
       expect(Object.keys(config.mcpServers)).toHaveLength(1);
-      expect(config.mcpServers['filtered-proj']?.url).toBe('http://localhost:3100/api/v1/mcp/proxy/project/filtered-proj');
+      expect(config.mcpServers['my-proj']?.url).toBe('http://localhost:3100/api/v1/mcp/proxy/project/my-proj');
     });
 
     it('resolves by name for mcp-config', async () => {
       const project = makeProject({
         id: 'proj-1',
         name: 'my-proj',
-        proxyMode: 'direct',
         servers: [],
       });
 
@@ -359,27 +285,8 @@ describe('ProjectService', () => {
       vi.mocked(projectRepo.findByName).mockResolvedValue(project);
 
       const config = await service.generateMcpConfig('my-proj');
-      expect(config.mcpServers).toEqual({});
-    });
-
-    it('includes env for STDIO servers', async () => {
-      const srv = makeServer({
-        id: 'srv-1',
-        name: 'github',
-        transport: 'STDIO',
-        env: [{ name: 'GITHUB_TOKEN', value: 'tok123' }],
-      });
-      const project = makeProject({
-        id: 'proj-1',
-        proxyMode: 'direct',
-        servers: [{ id: 'ps-1', server: { id: 'srv-1', name: 'github' } }],
-      });
-
-      vi.mocked(projectRepo.findById).mockResolvedValue(project);
-      vi.mocked(serverRepo.findById).mockResolvedValue(srv);
-
-      const config = await service.generateMcpConfig('proj-1');
-      expect(config.mcpServers['github']?.env?.['GITHUB_TOKEN']).toBe('tok123');
+      expect(Object.keys(config.mcpServers)).toHaveLength(1);
+      expect(config.mcpServers['my-proj']?.url).toBe('http://localhost:3100/api/v1/mcp/proxy/project/my-proj');
     });
   });
 });
diff --git a/src/mcpd/tests/prompt-routes.test.ts b/src/mcpd/tests/prompt-routes.test.ts
index ff21daf..42a483c 100644
--- a/src/mcpd/tests/prompt-routes.test.ts
+++ b/src/mcpd/tests/prompt-routes.test.ts
@@ -48,7 +48,6 @@ function makeProject(overrides: Partial<Project> = {}): Project {
     name: 'homeautomation',
     description: '',
     prompt: '',
-    proxyMode: 'direct',
     proxyModel: '',
     gated: true,
     llmProvider: null,
diff --git a/src/mcpd/tests/services/prompt-service.test.ts b/src/mcpd/tests/services/prompt-service.test.ts
index 80a2f9d..4bb550d 100644
--- a/src/mcpd/tests/services/prompt-service.test.ts
+++ b/src/mcpd/tests/services/prompt-service.test.ts
@@ -42,7 +42,6 @@ function makeProject(overrides: Partial<Project> = {}): Project {
     name: 'test-project',
     description: '',
     prompt: '',
-    proxyMode: 'direct',
     proxyModel: '',
     gated: true,
     llmProvider: null,
diff --git a/src/mcpd/tests/system-prompt-validation.test.ts b/src/mcpd/tests/system-prompt-validation.test.ts
index 95f96e5..ac23082 100644
--- a/src/mcpd/tests/system-prompt-validation.test.ts
+++ b/src/mcpd/tests/system-prompt-validation.test.ts
@@ -35,7 +35,6 @@ function makeProject(overrides: Partial<Project> = {}): Project {
     name: 'test-project',
     description: '',
     prompt: '',
-    proxyMode: 'direct',
     proxyModel: '',
     gated: true,
     llmProvider: null,
diff --git a/src/mcplocal/tests/smoke/fixtures/smoke-data.yaml b/src/mcplocal/tests/smoke/fixtures/smoke-data.yaml
index ea1b880..faf22e9 100644
--- a/src/mcplocal/tests/smoke/fixtures/smoke-data.yaml
+++ b/src/mcplocal/tests/smoke/fixtures/smoke-data.yaml
@@ -17,7 +17,6 @@ projects:
   - name: smoke-data
     description: "Smoke test project with 100 AWS documentation prompt links"
     gated: true
-    proxyMode: direct
 
 serverattachments:
   - server: smoke-aws-docs