Watchtower: A Local Proxy for Monitoring Claude Code API Traffic

What Watchtower Does

Watchtower is a local HTTP proxy combined with a real-time web dashboard. It intercepts all API traffic between Claude Code (or the Codex CLI) and their backend APIs. This allows developers to see every request, Server-Sent Events (SSE) stream, tool definition, system prompt, token usage, and rate limit in real time.

Key Features and Motivation

The tool was built using Claude Code itself. According to the creator, Claude Code typically sends 2-3 API calls per user message: one for quota checks, another for token counts, and then the actual streaming request. It also spawns subagents with completely different system prompts and smaller tool sets. The main system prompt alone is reported to be over 20,000 tokens. Normally, this internal communication is not visible to the user.

Setup and Usage

Installation is done via npm:

npm install -g watchtower-ai && watchtower-ai

To use it, run Claude Code while pointing it at the proxy by setting an environment variable:

ANTHROPIC_BASE_URL=http://localhost:8024 claude

The dashboard interface opens in your browser at http://localhost:8025.

Project Details

The entire project—including the proxy server, provider detection, SSE parsing, and the dashboard UI—was built using Claude Code. It is released under the MIT license, is free and open source, and has no paid tiers or account requirements.

The creator states this tool is useful for developers who want to see reasoning traces, understand token consumption patterns, or learn how the agent harness works in order to build better AI agents themselves.