diff --git a/fold.ce b/fold.ce
new file mode 100644
index 00000000..0881f8b8
--- /dev/null
+++ b/fold.ce
@@ -0,0 +1,13 @@
+var fd = use("fd")
+var json = use("json")
+
+var filename = args[0]
+var src = text(fd.slurp(filename))
+var tokenize = use("tokenize")
+var parse = use("parse")
+var fold = use("fold")
+
+var tok_result = tokenize(src, filename)
+var ast = parse(tok_result.tokens, src, filename, tokenize)
+var folded = fold(ast)
+print(json.encode(folded))
diff --git a/fold.cm b/fold.cm
new file mode 100644
index 00000000..bc3d114e
--- /dev/null
+++ b/fold.cm
@@ -0,0 +1,968 @@
+// fold.cm — AST optimization pass
+// Constant folding, constant propagation, dead code elimination
+
+var fold = function(ast) {
+  var scopes = ast.scopes
+  var nr_scopes = length(scopes)
+
+  // ============================================================
+  // Helpers
+  // ============================================================
+
+  var is_literal = function(expr) {
+    if (expr == null) return false
+    var k = expr.kind
+    return k == "number" || k == "text" || k == "true" || k == "false" || k == "null"
+  }
+
+  var is_pure = function(expr) {
+    if (expr == null) return true
+    var k = expr.kind
+    var i = 0
+    if (k == "number" || k == "text" || k == "true" || k == "false" ||
+        k == "null" || k == "name" || k == "this") return true
+    if (k == "function") return true
+    if (k == "!" || k == "~" || k == "-unary" || k == "+unary") {
+      return is_pure(expr.expression)
+    }
+    if (k == "array") {
+      i = 0
+      while (i < length(expr.list)) {
+        if (!is_pure(expr.list[i])) return false
+        i = i + 1
+      }
+      return true
+    }
+    if (k == "record") {
+      i = 0
+      while (i < length(expr.list)) {
+        if (!is_pure(expr.list[i].right)) return false
+        i = i + 1
+      }
+      return true
+    }
+    if (k == "then") {
+      return is_pure(expr.expression) && is_pure(expr.then) && is_pure(expr.else)
+    }
+    if (k == "==" || k == "!=" || k == "&&" || k == "||") {
+      return is_pure(expr.left) && is_pure(expr.right)
+    }
+    return false
+  }
+
+  var copy_loc = function(from, to) {
+    to.at = from.at
+    to.from_row = from.from_row
+    to.from_column = from.from_column
+    to.to_row = from.to_row
+    to.to_column = from.to_column
+    return to
+  }
+
+  var make_number = function(val, src) {
+    return copy_loc(src, {kind: "number", value: text(val), number: val})
+  }
+
+  var make_text = function(val, src) {
+    return copy_loc(src, {kind: "text", value: val})
+  }
+
+  var make_bool = function(val, src) {
+    if (val) return copy_loc(src, {kind: "true"})
+    return copy_loc(src, {kind: "false"})
+  }
+
+  var make_null = function(src) {
+    return copy_loc(src, {kind: "null"})
+  }
+
+  var is_truthy_literal = function(expr) {
+    if (expr == null) return null
+    var k = expr.kind
+    var nv = null
+    if (k == "true") return true
+    if (k == "false" || k == "null") return false
+    if (k == "number") {
+      nv = expr.number
+      if (nv == null) nv = number(expr.value)
+      return nv != 0
+    }
+    if (k == "text") return length(expr.value) > 0
+    return null
+  }
+
+  // ============================================================
+  // Scope helpers
+  // ============================================================
+
+  var find_scope = function(fn_nr) {
+    var i = 0
+    while (i < nr_scopes) {
+      if (scopes[i].function_nr == fn_nr) return scopes[i]
+      i = i + 1
+    }
+    return null
+  }
+
+  var scope_var = function(fn_nr, name) {
+    var sc = find_scope(fn_nr)
+    if (sc == null) return null
+    return sc[name]
+  }
+
+  var remove_scope_var = function(fn_nr, name) {
+    var sc = find_scope(fn_nr)
+    if (sc == null) return null
+    delete sc[name]
+  }
+
+  // ============================================================
+  // Pass 1: pre-scan for constants and function arities
+  // ============================================================
+
+  var const_defs = {}
+  var fn_arities = {}
+
+  var register_const = function(fn_nr, name, lit_node) {
+    var key = text(fn_nr)
+    if (const_defs[key] == null) const_defs[key] = {}
+    const_defs[key][name] = lit_node
+  }
+
+  var get_const = function(fn_nr, name) {
+    var key = text(fn_nr)
+    if (const_defs[key] == null) return null
+    return const_defs[key][name]
+  }
+
+  var register_arity = function(fn_nr, name, count) {
+    var key = text(fn_nr)
+    if (fn_arities[key] == null) fn_arities[key] = {}
+    fn_arities[key][name] = count
+  }
+
+  var pre_scan_stmts = null
+  var pre_scan_fn = null
+
+  pre_scan_fn = function(node) {
+    if (node == null) return null
+    if (node.statements != null) pre_scan_stmts(node.statements, node.function_nr)
+    if (node.disruption != null) pre_scan_stmts(node.disruption, node.function_nr)
+  }
+
+  pre_scan_stmts = function(stmts, fn_nr) {
+    var i = 0
+    var j = 0
+    var stmt = null
+    var kind = null
+    var name = null
+    var sv = null
+    var item = null
+    while (i < length(stmts)) {
+      stmt = stmts[i]
+      kind = stmt.kind
+      if (kind == "def") {
+        name = stmt.left.name
+        if (name != null && is_literal(stmt.right)) {
+          sv = scope_var(fn_nr, name)
+          if (sv != null && !sv.closure) {
+            register_const(fn_nr, name, stmt.right)
+          }
+        }
+      } else if (kind == "function") {
+        name = stmt.name
+        if (name != null && stmt.arity != null) {
+          register_arity(fn_nr, name, stmt.arity)
+        }
+        pre_scan_fn(stmt)
+      } else if (kind == "var") {
+        if (stmt.right != null && stmt.right.kind == "function" && stmt.right.arity != null) {
+          name = stmt.left.name
+          if (name != null) {
+            sv = scope_var(fn_nr, name)
+            if (sv != null && sv.make == "var") {
+              register_arity(fn_nr, name, stmt.right.arity)
+            }
+          }
+        }
+      } else if (kind == "var_list") {
+        j = 0
+        while (j < length(stmt.list)) {
+          item = stmt.list[j]
+          if (item.kind == "var" && item.right != null && item.right.kind == "function" && item.right.arity != null) {
+            name = item.left.name
+            if (name != null) {
+              sv = scope_var(fn_nr, name)
+              if (sv != null && sv.make == "var") {
+                register_arity(fn_nr, name, item.right.arity)
+              }
+            }
+          }
+          j = j + 1
+        }
+      }
+      i = i + 1
+    }
+  }
+
+  var pre_scan_expr_fns = null
+  pre_scan_expr_fns = function(expr) {
+    if (expr == null) return null
+    var k = expr.kind
+    var i = 0
+    if (k == "function") {
+      pre_scan_fn(expr)
+    }
+    if (expr.left != null) pre_scan_expr_fns(expr.left)
+    if (expr.right != null) pre_scan_expr_fns(expr.right)
+    if (expr.expression != null) pre_scan_expr_fns(expr.expression)
+    if (expr.then != null) pre_scan_expr_fns(expr.then)
+    if (expr.else != null) pre_scan_expr_fns(expr.else)
+    if (k == "(" || k == "array") {
+      i = 0
+      while (i < length(expr.list)) {
+        pre_scan_expr_fns(expr.list[i])
+        i = i + 1
+      }
+    }
+    if (k == "record") {
+      i = 0
+      while (i < length(expr.list)) {
+        pre_scan_expr_fns(expr.list[i].right)
+        i = i + 1
+      }
+    }
+  }
+
+  var pre_scan_stmt_exprs = null
+  pre_scan_stmt_exprs = function(stmts, fn_nr) {
+    var i = 0
+    var j = 0
+    var stmt = null
+    var kind = null
+    while (i < length(stmts)) {
+      stmt = stmts[i]
+      kind = stmt.kind
+      if (kind == "var" || kind == "def") {
+        pre_scan_expr_fns(stmt.right)
+      } else if (kind == "var_list") {
+        j = 0
+        while (j < length(stmt.list)) {
+          pre_scan_expr_fns(stmt.list[j].right)
+          j = j + 1
+        }
+      } else if (kind == "call") {
+        pre_scan_expr_fns(stmt.expression)
+      } else if (kind == "if") {
+        pre_scan_expr_fns(stmt.expression)
+        pre_scan_stmt_exprs(stmt.then, fn_nr)
+        pre_scan_stmt_exprs(stmt.list, fn_nr)
+        if (stmt.else != null) pre_scan_stmt_exprs(stmt.else, fn_nr)
+      } else if (kind == "while" || kind == "do") {
+        pre_scan_expr_fns(stmt.expression)
+        pre_scan_stmt_exprs(stmt.statements, fn_nr)
+      } else if (kind == "for") {
+        if (stmt.init != null) {
+          if (stmt.init.kind == "var" || stmt.init.kind == "def") {
+            pre_scan_expr_fns(stmt.init.right)
+          } else {
+            pre_scan_expr_fns(stmt.init)
+          }
+        }
+        pre_scan_expr_fns(stmt.test)
+        pre_scan_expr_fns(stmt.update)
+        pre_scan_stmt_exprs(stmt.statements, fn_nr)
+      } else if (kind == "return" || kind == "go") {
+        pre_scan_expr_fns(stmt.expression)
+      } else if (kind == "block") {
+        pre_scan_stmt_exprs(stmt.statements, fn_nr)
+      } else if (kind == "label") {
+        if (stmt.statement != null) {
+          pre_scan_stmt_exprs([stmt.statement], fn_nr)
+        }
+      } else if (kind == "function") {
+        // already handled in pre_scan_stmts
+        null
+      }
+      i = i + 1
+    }
+  }
+
+  var pre_scan = function() {
+    pre_scan_stmts(ast.statements, 0)
+    pre_scan_stmts(ast.functions, 0)
+    pre_scan_stmt_exprs(ast.statements, 0)
+    pre_scan_stmt_exprs(ast.functions, 0)
+  }
+
+  // ============================================================
+  // Pass 2: fold expressions and statements
+  // ============================================================
+
+  var fold_expr = null
+  var fold_stmt = null
+  var fold_stmts = null
+
+  fold_expr = function(expr, fn_nr) {
+    if (expr == null) return null
+    var k = expr.kind
+    var left = null
+    var right = null
+    var lv = null
+    var rv = null
+    var result = null
+    var i = 0
+    var sv = null
+    var lit = null
+    var cond_k = null
+    var ek = null
+    var target = null
+    var ar = null
+    var akey = null
+    var tv = null
+
+    // Recurse into children first (bottom-up)
+    if (k == "+" || k == "-" || k == "*" || k == "/" || k == "%" ||
+        k == "**" || k == "==" || k == "!=" || k == "<" || k == ">" ||
+        k == "<=" || k == ">=" || k == "&" || k == "|" || k == "^" ||
+        k == "<<" || k == ">>" || k == ">>>" || k == "&&" || k == "||" ||
+        k == "," || k == "in") {
+      expr.left = fold_expr(expr.left, fn_nr)
+      expr.right = fold_expr(expr.right, fn_nr)
+    } else if (k == "." || k == "[") {
+      expr.left = fold_expr(expr.left, fn_nr)
+      if (k == "[" && expr.right != null) expr.right = fold_expr(expr.right, fn_nr)
+    } else if (k == "!" || k == "~" || k == "-unary" || k == "+unary" || k == "delete") {
+      expr.expression = fold_expr(expr.expression, fn_nr)
+    } else if (k == "++" || k == "--") {
+      return expr
+    } else if (k == "then") {
+      expr.expression = fold_expr(expr.expression, fn_nr)
+      expr.then = fold_expr(expr.then, fn_nr)
+      expr.else = fold_expr(expr.else, fn_nr)
+    } else if (k == "(") {
+      expr.expression = fold_expr(expr.expression, fn_nr)
+      i = 0
+      while (i < length(expr.list)) {
+        expr.list[i] = fold_expr(expr.list[i], fn_nr)
+        i = i + 1
+      }
+    } else if (k == "array") {
+      i = 0
+      while (i < length(expr.list)) {
+        expr.list[i] = fold_expr(expr.list[i], fn_nr)
+        i = i + 1
+      }
+    } else if (k == "record") {
+      i = 0
+      while (i < length(expr.list)) {
+        expr.list[i].right = fold_expr(expr.list[i].right, fn_nr)
+        i = i + 1
+      }
+    } else if (k == "text literal") {
+      i = 0
+      while (i < length(expr.list)) {
+        expr.list[i] = fold_expr(expr.list[i], fn_nr)
+        i = i + 1
+      }
+    } else if (k == "function") {
+      fold_fn(expr)
+      return expr
+    } else if (k == "assign" || k == "+=" || k == "-=" || k == "*=" ||
+               k == "/=" || k == "%=" || k == "<<=" || k == ">>=" ||
+               k == ">>>=" || k == "&=" || k == "^=" || k == "|=" ||
+               k == "**=" || k == "&&=" || k == "||=") {
+      expr.right = fold_expr(expr.right, fn_nr)
+      return expr
+    }
+
+    // Constant propagation: name → literal
+    if (k == "name" && expr.level == 0) {
+      lit = get_const(fn_nr, expr.name)
+      if (lit != null) {
+        sv = scope_var(fn_nr, expr.name)
+        if (sv != null && !sv.closure) {
+          return copy_loc(expr, {kind: lit.kind, value: lit.value, number: lit.number})
+        }
+      }
+      return expr
+    }
+
+    // Binary constant folding
+    if (k == "+" || k == "-" || k == "*" || k == "/" || k == "%" || k == "**") {
+      left = expr.left
+      right = expr.right
+      if (left != null && right != null && left.kind == "number" && right.kind == "number") {
+        lv = left.number
+        rv = right.number
+        if (lv == null) lv = number(left.value)
+        if (rv == null) rv = number(right.value)
+        if (k == "/") {
+          if (rv == 0) return make_null(expr)
+        }
+        if (k == "%") {
+          if (rv == 0) return make_null(expr)
+        }
+        result = null
+        if (k == "+") result = lv + rv
+        else if (k == "-") result = lv - rv
+        else if (k == "*") result = lv * rv
+        else if (k == "/") result = lv / rv
+        else if (k == "%") result = lv % rv
+        else if (k == "**") result = lv ** rv
+        if (result == null) return make_null(expr)
+        return make_number(result, expr)
+      }
+      // text + text
+      if (k == "+" && left != null && right != null && left.kind == "text" && right.kind == "text") {
+        return make_text(left.value + right.value, expr)
+      }
+      return expr
+    }
+
+    // Comparison folding
+    if (k == "==" || k == "!=" || k == "<" || k == ">" || k == "<=" || k == ">=") {
+      left = expr.left
+      right = expr.right
+      if (left != null && right != null) {
+        if (left.kind == "number" && right.kind == "number") {
+          lv = left.number
+          rv = right.number
+          if (lv == null) lv = number(left.value)
+          if (rv == null) rv = number(right.value)
+          if (k == "==") return make_bool(lv == rv, expr)
+          if (k == "!=") return make_bool(lv != rv, expr)
+          if (k == "<") return make_bool(lv < rv, expr)
+          if (k == ">") return make_bool(lv > rv, expr)
+          if (k == "<=") return make_bool(lv <= rv, expr)
+          if (k == ">=") return make_bool(lv >= rv, expr)
+        }
+        if (left.kind == "text" && right.kind == "text") {
+          if (k == "==") return make_bool(left.value == right.value, expr)
+          if (k == "!=") return make_bool(left.value != right.value, expr)
+        }
+      }
+      return expr
+    }
+
+    // Bitwise folding
+    if (k == "&" || k == "|" || k == "^" || k == "<<" || k == ">>") {
+      left = expr.left
+      right = expr.right
+      if (left != null && right != null && left.kind == "number" && right.kind == "number") {
+        lv = left.number
+        rv = right.number
+        if (lv == null) lv = number(left.value)
+        if (rv == null) rv = number(right.value)
+        if (k == "&") return make_number(lv & rv, expr)
+        if (k == "|") return make_number(lv | rv, expr)
+        if (k == "^") return make_number(lv ^ rv, expr)
+        if (k == "<<") return make_number(lv << rv, expr)
+        if (k == ">>") return make_number(lv >> rv, expr)
+      }
+      return expr
+    }
+
+    // Unary folding
+    if (k == "!") {
+      if (expr.expression != null) {
+        ek = expr.expression.kind
+        if (ek == "true") return make_bool(false, expr)
+        if (ek == "false") return make_bool(true, expr)
+      }
+      return expr
+    }
+    if (k == "~") {
+      if (expr.expression != null && expr.expression.kind == "number") {
+        lv = expr.expression.number
+        if (lv == null) lv = number(expr.expression.value)
+        return make_number(~lv, expr)
+      }
+      return expr
+    }
+    if (k == "-unary") {
+      if (expr.expression != null && expr.expression.kind == "number") {
+        lv = expr.expression.number
+        if (lv == null) lv = number(expr.expression.value)
+        return make_number(0 - lv, expr)
+      }
+      return expr
+    }
+
+    // Ternary with literal condition
+    if (k == "then") {
+      tv = is_truthy_literal(expr.expression)
+      if (tv == true) return expr.then
+      if (tv == false) return expr.else
+      return expr
+    }
+
+    // Call: stamp arity
+    if (k == "(") {
+      target = expr.expression
+      if (target != null && target.kind == "name" && target.level == 0) {
+        ar = null
+        akey = text(fn_nr)
+        if (fn_arities[akey] != null) ar = fn_arities[akey][target.name]
+        if (ar != null) expr.arity = ar
+      }
+      return expr
+    }
+
+    return expr
+  }
+
+  var fold_fn = null
+
+  fold_stmt = function(stmt, fn_nr) {
+    if (stmt == null) return null
+    var k = stmt.kind
+    var i = 0
+    var sv = null
+    var cond_k = null
+    var ik = null
+    var tv = null
+
+    if (k == "var" || k == "def") {
+      stmt.right = fold_expr(stmt.right, fn_nr)
+      return stmt
+    }
+    if (k == "var_list") {
+      i = 0
+      while (i < length(stmt.list)) {
+        stmt.list[i] = fold_stmt(stmt.list[i], fn_nr)
+        i = i + 1
+      }
+      return stmt
+    }
+    if (k == "call") {
+      stmt.expression = fold_expr(stmt.expression, fn_nr)
+      return stmt
+    }
+    if (k == "if") {
+      stmt.expression = fold_expr(stmt.expression, fn_nr)
+      tv = is_truthy_literal(stmt.expression)
+      if (tv == true) {
+        stmt.then = fold_stmts(stmt.then, fn_nr)
+        return {kind: "block", statements: stmt.then,
+          at: stmt.at, from_row: stmt.from_row, from_column: stmt.from_column,
+          to_row: stmt.to_row, to_column: stmt.to_column}
+      }
+      if (tv == false) {
+        if (stmt.else != null && length(stmt.else) > 0) {
+          stmt.else = fold_stmts(stmt.else, fn_nr)
+          return {kind: "block", statements: stmt.else,
+            at: stmt.at, from_row: stmt.from_row, from_column: stmt.from_column,
+            to_row: stmt.to_row, to_column: stmt.to_column}
+        }
+        if (stmt.list != null && length(stmt.list) > 0) {
+          return fold_stmt(stmt.list[0], fn_nr)
+        }
+        return null
+      }
+      stmt.then = fold_stmts(stmt.then, fn_nr)
+      stmt.list = fold_stmts(stmt.list, fn_nr)
+      if (stmt.else != null) stmt.else = fold_stmts(stmt.else, fn_nr)
+      return stmt
+    }
+    if (k == "while") {
+      stmt.expression = fold_expr(stmt.expression, fn_nr)
+      if (stmt.expression.kind == "false" || stmt.expression.kind == "null") return null
+      stmt.statements = fold_stmts(stmt.statements, fn_nr)
+      return stmt
+    }
+    if (k == "do") {
+      stmt.statements = fold_stmts(stmt.statements, fn_nr)
+      stmt.expression = fold_expr(stmt.expression, fn_nr)
+      return stmt
+    }
+    if (k == "for") {
+      if (stmt.init != null) {
+        ik = stmt.init.kind
+        if (ik == "var" || ik == "def") {
+          stmt.init = fold_stmt(stmt.init, fn_nr)
+        } else {
+          stmt.init = fold_expr(stmt.init, fn_nr)
+        }
+      }
+      if (stmt.test != null) stmt.test = fold_expr(stmt.test, fn_nr)
+      if (stmt.update != null) stmt.update = fold_expr(stmt.update, fn_nr)
+      stmt.statements = fold_stmts(stmt.statements, fn_nr)
+      return stmt
+    }
+    if (k == "return" || k == "go") {
+      stmt.expression = fold_expr(stmt.expression, fn_nr)
+      return stmt
+    }
+    if (k == "block") {
+      stmt.statements = fold_stmts(stmt.statements, fn_nr)
+      return stmt
+    }
+    if (k == "label") {
+      stmt.statement = fold_stmt(stmt.statement, fn_nr)
+      return stmt
+    }
+    if (k == "function") {
+      fold_fn(stmt)
+      return stmt
+    }
+    return stmt
+  }
+
+  fold_stmts = function(stmts, fn_nr) {
+    var i = 0
+    var stmt = null
+    var out = []
+    var sv = null
+    var name = null
+    while (i < length(stmts)) {
+      stmt = fold_stmt(stmts[i], fn_nr)
+      if (stmt == null) {
+        i = i + 1
+        continue
+      }
+      // Dead code elimination: unused pure var/def
+      if (stmt.kind == "var" || stmt.kind == "def") {
+        name = stmt.left.name
+        if (name != null) {
+          sv = scope_var(fn_nr, name)
+          if (sv != null && sv.nr_uses == 0 && is_pure(stmt.right)) {
+            stmt.dead = true
+          }
+        }
+      }
+      // Dead function elimination
+      if (stmt.kind == "function" && stmt.name != null) {
+        sv = scope_var(fn_nr, stmt.name)
+        if (sv != null && sv.nr_uses == 0) {
+          stmt.dead = true
+        }
+      }
+      if (stmt.dead != true) push(out, stmt)
+      i = i + 1
+    }
+    return out
+  }
+
+  fold_fn = function(node) {
+    if (node == null) return null
+    var fn_nr = node.function_nr
+    if (fn_nr == null) return null
+    // Fold param defaults
+    var i = 0
+    while (i < length(node.list)) {
+      if (node.list[i].expression != null) {
+        node.list[i].expression = fold_expr(node.list[i].expression, fn_nr)
+      }
+      i = i + 1
+    }
+    if (node.statements != null) node.statements = fold_stmts(node.statements, fn_nr)
+    if (node.disruption != null) node.disruption = fold_stmts(node.disruption, fn_nr)
+  }
+
+  // ============================================================
+  // Pass 3: cleanup scopes
+  // ============================================================
+
+  var cleanup = function() {
+    var i = 0
+    var sc = null
+    var keys = null
+    var j = 0
+    var key = null
+    var entry = null
+    var slots = 0
+    var close_slots = 0
+
+    // Remove dead vars from scope records and recalculate slot counts
+    while (i < nr_scopes) {
+      sc = scopes[i]
+      keys = array(sc)
+      slots = 0
+      close_slots = 0
+      j = 0
+      while (j < length(keys)) {
+        key = keys[j]
+        if (key != "function_nr") {
+          entry = sc[key]
+          if (entry != null && entry.nr_uses == 0 && entry.make != "input") {
+            delete sc[key]
+          } else if (entry != null) {
+            slots = slots + 1
+            if (entry.closure) close_slots = close_slots + 1
+          }
+        }
+        j = j + 1
+      }
+      i = i + 1
+    }
+
+    // Update nr_slots and nr_close_slots on function nodes
+    var update_fn_slots = null
+    update_fn_slots = function(node) {
+      if (node == null) return null
+      var fn_nr = node.function_nr
+      if (fn_nr == null) return null
+      var sc = find_scope(fn_nr)
+      if (sc == null) return null
+      var keys = array(sc)
+      var s = 0
+      var cs = 0
+      var ki = 0
+      var ent = null
+      while (ki < length(keys)) {
+        if (keys[ki] != "function_nr") {
+          ent = sc[keys[ki]]
+          if (ent != null) {
+            s = s + 1
+            if (ent.closure) cs = cs + 1
+          }
+        }
+        ki = ki + 1
+      }
+      node.nr_slots = s
+      node.nr_close_slots = cs
+    }
+
+    var walk_stmts_for_fns = null
+    var walk_expr_for_fns = null
+
+    walk_expr_for_fns = function(expr) {
+      if (expr == null) return null
+      var k = expr.kind
+      var i = 0
+      if (k == "function") {
+        update_fn_slots(expr)
+        walk_stmts_for_fns(expr.statements)
+        walk_stmts_for_fns(expr.disruption)
+        return null
+      }
+      if (expr.left != null) walk_expr_for_fns(expr.left)
+      if (expr.right != null) walk_expr_for_fns(expr.right)
+      if (expr.expression != null) walk_expr_for_fns(expr.expression)
+      if (expr.then != null) walk_expr_for_fns(expr.then)
+      if (expr.else != null) walk_expr_for_fns(expr.else)
+      if (k == "(" || k == "array" || k == "text literal") {
+        i = 0
+        while (i < length(expr.list)) {
+          walk_expr_for_fns(expr.list[i])
+          i = i + 1
+        }
+      }
+      if (k == "record") {
+        i = 0
+        while (i < length(expr.list)) {
+          walk_expr_for_fns(expr.list[i].right)
+          i = i + 1
+        }
+      }
+    }
+
+    walk_stmts_for_fns = function(stmts) {
+      if (stmts == null) return null
+      var i = 0
+      var j = 0
+      var stmt = null
+      var k = null
+      while (i < length(stmts)) {
+        stmt = stmts[i]
+        k = stmt.kind
+        if (k == "function") {
+          update_fn_slots(stmt)
+          walk_stmts_for_fns(stmt.statements)
+          walk_stmts_for_fns(stmt.disruption)
+        } else if (k == "var" || k == "def") {
+          walk_expr_for_fns(stmt.right)
+        } else if (k == "var_list") {
+          j = 0
+          while (j < length(stmt.list)) {
+            walk_expr_for_fns(stmt.list[j].right)
+            j = j + 1
+          }
+        } else if (k == "call") {
+          walk_expr_for_fns(stmt.expression)
+        } else if (k == "if") {
+          walk_expr_for_fns(stmt.expression)
+          walk_stmts_for_fns(stmt.then)
+          walk_stmts_for_fns(stmt.list)
+          if (stmt.else != null) walk_stmts_for_fns(stmt.else)
+        } else if (k == "while" || k == "do") {
+          walk_expr_for_fns(stmt.expression)
+          walk_stmts_for_fns(stmt.statements)
+        } else if (k == "for") {
+          if (stmt.init != null) {
+            if (stmt.init.kind == "var" || stmt.init.kind == "def") {
+              walk_expr_for_fns(stmt.init.right)
+            } else {
+              walk_expr_for_fns(stmt.init)
+            }
+          }
+          walk_expr_for_fns(stmt.test)
+          walk_expr_for_fns(stmt.update)
+          walk_stmts_for_fns(stmt.statements)
+        } else if (k == "return" || k == "go") {
+          walk_expr_for_fns(stmt.expression)
+        } else if (k == "block") {
+          walk_stmts_for_fns(stmt.statements)
+        } else if (k == "label") {
+          if (stmt.statement != null) walk_stmts_for_fns([stmt.statement])
+        }
+        i = i + 1
+      }
+    }
+
+    walk_stmts_for_fns(ast.statements)
+    walk_stmts_for_fns(ast.functions)
+
+    // Update intrinsics: collect what's still referenced
+    var used_intrinsics = {}
+    var collect_intrinsics = null
+    var collect_expr_intrinsics = null
+
+    collect_expr_intrinsics = function(expr) {
+      if (expr == null) return null
+      var k = expr.kind
+      var i = 0
+      if (k == "name" && expr.level == -1 && expr.name != null && expr.make != "functino") {
+        used_intrinsics[expr.name] = true
+      }
+      if (expr.left != null) collect_expr_intrinsics(expr.left)
+      if (expr.right != null) collect_expr_intrinsics(expr.right)
+      if (expr.expression != null) collect_expr_intrinsics(expr.expression)
+      if (expr.then != null) collect_expr_intrinsics(expr.then)
+      if (expr.else != null) collect_expr_intrinsics(expr.else)
+      if (k == "(" || k == "array" || k == "text literal") {
+        i = 0
+        while (i < length(expr.list)) {
+          collect_expr_intrinsics(expr.list[i])
+          i = i + 1
+        }
+      }
+      if (k == "record") {
+        i = 0
+        while (i < length(expr.list)) {
+          collect_expr_intrinsics(expr.list[i].right)
+          i = i + 1
+        }
+      }
+      if (k == "function") {
+        collect_intrinsics(expr.statements)
+        collect_intrinsics(expr.disruption)
+        i = 0
+        while (i < length(expr.list)) {
+          if (expr.list[i].expression != null) {
+            collect_expr_intrinsics(expr.list[i].expression)
+          }
+          i = i + 1
+        }
+      }
+    }
+
+    collect_intrinsics = function(stmts) {
+      if (stmts == null) return null
+      var i = 0
+      var j = 0
+      var pi = 0
+      var stmt = null
+      var k = null
+      while (i < length(stmts)) {
+        stmt = stmts[i]
+        k = stmt.kind
+        if (k == "var" || k == "def") {
+          collect_expr_intrinsics(stmt.right)
+        } else if (k == "var_list") {
+          j = 0
+          while (j < length(stmt.list)) {
+            collect_expr_intrinsics(stmt.list[j].right)
+            j = j + 1
+          }
+        } else if (k == "call") {
+          collect_expr_intrinsics(stmt.expression)
+        } else if (k == "if") {
+          collect_expr_intrinsics(stmt.expression)
+          collect_intrinsics(stmt.then)
+          collect_intrinsics(stmt.list)
+          if (stmt.else != null) collect_intrinsics(stmt.else)
+        } else if (k == "while" || k == "do") {
+          collect_expr_intrinsics(stmt.expression)
+          collect_intrinsics(stmt.statements)
+        } else if (k == "for") {
+          if (stmt.init != null) {
+            if (stmt.init.kind == "var" || stmt.init.kind == "def") {
+              collect_expr_intrinsics(stmt.init.right)
+            } else {
+              collect_expr_intrinsics(stmt.init)
+            }
+          }
+          collect_expr_intrinsics(stmt.test)
+          collect_expr_intrinsics(stmt.update)
+          collect_intrinsics(stmt.statements)
+        } else if (k == "return" || k == "go") {
+          collect_expr_intrinsics(stmt.expression)
+        } else if (k == "function") {
+          collect_intrinsics(stmt.statements)
+          collect_intrinsics(stmt.disruption)
+          pi = 0
+          while (pi < length(stmt.list)) {
+            if (stmt.list[pi].expression != null) {
+              collect_expr_intrinsics(stmt.list[pi].expression)
+            }
+            pi = pi + 1
+          }
+        } else if (k == "block") {
+          collect_intrinsics(stmt.statements)
+        } else if (k == "label") {
+          if (stmt.statement != null) collect_intrinsics([stmt.statement])
+        }
+        i = i + 1
+      }
+    }
+
+    collect_intrinsics(ast.statements)
+    collect_intrinsics(ast.functions)
+
+    var new_intrinsics = []
+    i = 0
+    while (i < length(ast.intrinsics)) {
+      if (used_intrinsics[ast.intrinsics[i]] == true) {
+        push(new_intrinsics, ast.intrinsics[i])
+      }
+      i = i + 1
+    }
+    ast.intrinsics = new_intrinsics
+  }
+
+  // ============================================================
+  // Main
+  // ============================================================
+
+  pre_scan()
+
+  // Pass 2: fold all statements and functions
+  ast.statements = fold_stmts(ast.statements, 0)
+  var fi = 0
+  while (fi < length(ast.functions)) {
+    fold_fn(ast.functions[fi])
+    fi = fi + 1
+  }
+
+  // Remove dead top-level functions
+  var live_fns = []
+  var fn = null
+  fi = 0
+  while (fi < length(ast.functions)) {
+    fn = ast.functions[fi]
+    if (fn.dead != true) {
+      push(live_fns, fn)
+    }
+    fi = fi + 1
+  }
+  ast.functions = live_fns
+
+  // Pass 3: cleanup
+  cleanup()
+
+  return ast
+}
+
+return fold
diff --git a/internal/bootstrap.cm b/internal/bootstrap.cm
index 6118967a..3fe1aa97 100644
--- a/internal/bootstrap.cm
+++ b/internal/bootstrap.cm
@@ -24,8 +24,10 @@ function use_basic(path) {
 
 var tok_path = core_path + "/tokenize.cm"
 var par_path = core_path + "/parse.cm"
+var fold_path = core_path + "/fold.cm"
 var tokenize_mod = mach_eval("tokenize", text(fd.slurp(tok_path)), {use: use_basic})
 var parse_mod = mach_eval("parse", text(fd.slurp(par_path)), {use: use_basic})
+var fold_mod = mach_eval("fold", text(fd.slurp(fold_path)), {use: use_basic})
 
 // Optionally load mcode compiler module
 var mcode_mod = null
@@ -66,6 +68,7 @@ function analyze(src, filename) {
     }
     disrupt
   }
+  ast = fold_mod(ast)
   return ast
 }
 
diff --git a/parse.cm b/parse.cm
index 36a6f107..1f9dd688 100644
--- a/parse.cm
+++ b/parse.cm
@@ -403,6 +403,7 @@ var parse = function(tokens, src, filename, tokenizer) {
           if (tok.kind == ")") advance()
           else if (tok.kind == "eof") parse_error(tok, "unterminated method parameter list")
           if (length(params) > 4) parse_error(tok, "functions cannot have more than 4 parameters")
+          fn.arity = length(params)
           if (tok.kind == "{") {
             advance()
             fn.statements = parse_block_statements()
@@ -843,6 +844,7 @@ var parse = function(tokens, src, filename, tokenizer) {
     }
 
     if (length(params) > 4) parse_error(tok, "functions cannot have more than 4 parameters")
+    node.arity = length(params)
 
     if (tok.kind == "{") {
       advance()
@@ -935,6 +937,7 @@ var parse = function(tokens, src, filename, tokenizer) {
     }
 
     if (length(params) > 4) parse_error(tok, "functions cannot have more than 4 parameters")
+    node.arity = length(params)
 
     if (tok.kind != "=>") {
       parse_error(tok, "expected '=>' in arrow function")
@@ -1274,7 +1277,6 @@ var parse = function(tokens, src, filename, tokenizer) {
   var sem_errors = []
   var scopes_array = []
   var intrinsics = []
-  var block_var_counter = 0
 
   var sem_error = function(node, msg) {
     var err = {message: msg}
@@ -1289,15 +1291,13 @@ var parse = function(tokens, src, filename, tokenizer) {
       vars: [],
       in_loop: opts.in_loop == true,
       function_nr: fn_nr,
-      is_function_scope: opts.is_func == true,
-      block_depth: opts.bdepth != null ? opts.bdepth : 0
+      is_function_scope: opts.is_func == true
     }
   }
 
   var sem_add_var = function(scope, name, make_opts) {
     push(scope.vars, {
       name: name,
-      scope_name: null,
       is_const: make_opts.is_const == true,
       make: make_opts.make,
       function_nr: make_opts.fn_nr,
@@ -1364,23 +1364,10 @@ var parse = function(tokens, src, filename, tokenizer) {
     return functino_names[name] == true
   }
 
-  var sem_propagate_block_vars = function(parent, block) {
+  var sem_propagate_vars = function(parent, child) {
     var i = 0
-    var v = null
-    var sn = null
-    while (i < length(block.vars)) {
-      v = block.vars[i]
-      sn = v.scope_name
-      if (sn == null) sn = v.name
-      push(parent.vars, {
-        name: sn,
-        scope_name: null,
-        is_const: v.is_const,
-        make: v.make,
-        function_nr: v.function_nr,
-        nr_uses: v.nr_uses,
-        closure: v.closure
-      })
+    while (i < length(child.vars)) {
+      push(parent.vars, child.vars[i])
       i = i + 1
     }
   }
@@ -1471,7 +1458,6 @@ var parse = function(tokens, src, filename, tokenizer) {
       if (r.v != null) {
         left_node.level = r.level
         left_node.function_nr = r.def_function_nr
-        if (r.v.scope_name != null) left_node.scope_name = r.v.scope_name
       } else {
         left_node.level = -1
       }
@@ -1525,7 +1511,6 @@ var parse = function(tokens, src, filename, tokenizer) {
           if (r.v != null) {
             operand.level = r.level
             operand.function_nr = r.def_function_nr
-            if (r.v.scope_name != null) operand.scope_name = r.v.scope_name
           } else {
             operand.level = -1
           }
@@ -1647,7 +1632,6 @@ var parse = function(tokens, src, filename, tokenizer) {
           expr.function_nr = r.def_function_nr
           r.v.nr_uses = r.v.nr_uses + 1
           if (r.level > 0) r.v.closure = 1
-          if (r.v.scope_name != null) expr.scope_name = r.v.scope_name
         } else {
           expr.level = -1
           sem_add_intrinsic(name)
@@ -1664,15 +1648,10 @@ var parse = function(tokens, src, filename, tokenizer) {
     var name = null
     var existing = null
     var i = 0
-    var sn = null
-    var then_scope = null
-    var list_scope = null
-    var else_scope = null
     var loop_scope = null
     var do_scope = null
     var for_scope = null
     var init_kind = null
-    var blk_scope = null
     var fn_nr_val = null
     var fn_scope = null
     var pname = null
@@ -1695,15 +1674,9 @@ var parse = function(tokens, src, filename, tokenizer) {
         if (existing != null && existing.is_const) {
           sem_error(stmt.left, "cannot redeclare constant '" + name + "'")
         }
-        if (existing == null || existing.function_nr != scope.function_nr || scope.block_depth > 0) {
+        if (existing == null || existing.function_nr != scope.function_nr) {
           sem_add_var(scope, name, {make: "var", fn_nr: scope.function_nr})
         }
-        if (scope.block_depth > 0) {
-          sn = "_" + name + "_" + text(block_var_counter)
-          block_var_counter = block_var_counter + 1
-          scope.vars[length(scope.vars) - 1].scope_name = sn
-          stmt.left.scope_name = sn
-        }
       }
       sem_check_expr(scope, stmt.right)
       return null
@@ -1720,12 +1693,6 @@ var parse = function(tokens, src, filename, tokenizer) {
           existing.make = "def"
         } else {
           sem_add_var(scope, name, {is_const: true, make: "def", fn_nr: scope.function_nr})
-          if (scope.block_depth > 0) {
-            sn = "_" + name + "_" + text(block_var_counter)
-            block_var_counter = block_var_counter + 1
-            scope.vars[length(scope.vars) - 1].scope_name = sn
-            stmt.left.scope_name = sn
-          }
         }
       }
       sem_check_expr(scope, stmt.right)
@@ -1739,58 +1706,52 @@ var parse = function(tokens, src, filename, tokenizer) {
 
     if (kind == "if") {
       sem_check_expr(scope, stmt.expression)
-      then_scope = make_scope(scope, scope.function_nr, {bdepth: scope.block_depth + 1})
       i = 0
       while (i < length(stmt.then)) {
-        sem_check_stmt(then_scope, stmt.then[i])
+        sem_check_stmt(scope, stmt.then[i])
         i = i + 1
       }
-      sem_propagate_block_vars(scope, then_scope)
-      list_scope = make_scope(scope, scope.function_nr, {bdepth: scope.block_depth + 1})
       i = 0
       while (i < length(stmt.list)) {
-        sem_check_stmt(list_scope, stmt.list[i])
+        sem_check_stmt(scope, stmt.list[i])
         i = i + 1
       }
-      sem_propagate_block_vars(scope, list_scope)
       if (stmt.else != null) {
-        else_scope = make_scope(scope, scope.function_nr, {bdepth: scope.block_depth + 1})
         i = 0
         while (i < length(stmt.else)) {
-          sem_check_stmt(else_scope, stmt.else[i])
+          sem_check_stmt(scope, stmt.else[i])
           i = i + 1
         }
-        sem_propagate_block_vars(scope, else_scope)
       }
       return null
     }
 
     if (kind == "while") {
       sem_check_expr(scope, stmt.expression)
-      loop_scope = make_scope(scope, scope.function_nr, {in_loop: true, bdepth: scope.block_depth + 1})
+      loop_scope = make_scope(scope, scope.function_nr, {in_loop: true})
       i = 0
       while (i < length(stmt.statements)) {
         sem_check_stmt(loop_scope, stmt.statements[i])
         i = i + 1
       }
-      sem_propagate_block_vars(scope, loop_scope)
+      sem_propagate_vars(scope, loop_scope)
       return null
     }
 
     if (kind == "do") {
-      do_scope = make_scope(scope, scope.function_nr, {in_loop: true, bdepth: scope.block_depth + 1})
+      do_scope = make_scope(scope, scope.function_nr, {in_loop: true})
       i = 0
       while (i < length(stmt.statements)) {
         sem_check_stmt(do_scope, stmt.statements[i])
         i = i + 1
       }
-      sem_propagate_block_vars(scope, do_scope)
+      sem_propagate_vars(scope, do_scope)
       sem_check_expr(scope, stmt.expression)
       return null
     }
 
     if (kind == "for") {
-      for_scope = make_scope(scope, scope.function_nr, {in_loop: true, bdepth: scope.block_depth + 1})
+      for_scope = make_scope(scope, scope.function_nr, {in_loop: true})
       if (stmt.init != null) {
         init_kind = stmt.init.kind
         if (init_kind == "var" || init_kind == "def") {
@@ -1806,7 +1767,7 @@ var parse = function(tokens, src, filename, tokenizer) {
         sem_check_stmt(for_scope, stmt.statements[i])
         i = i + 1
       }
-      sem_propagate_block_vars(scope, for_scope)
+      sem_propagate_vars(scope, for_scope)
       return null
     }
 
@@ -1834,13 +1795,11 @@ var parse = function(tokens, src, filename, tokenizer) {
     }
 
     if (kind == "block") {
-      blk_scope = make_scope(scope, scope.function_nr, {bdepth: scope.block_depth + 1})
       i = 0
       while (i < length(stmt.statements)) {
-        sem_check_stmt(blk_scope, stmt.statements[i])
+        sem_check_stmt(scope, stmt.statements[i])
         i = i + 1
       }
-      sem_propagate_block_vars(scope, blk_scope)
       return null
     }