TERAG: Token-Efficient Graph-Based Retrieval-Augmented Generation

Abstract: Graph-based Retrieval-augmented generation (RAG) has become a widely studied approach for improving the reasoning, accuracy, and factuality of LLMs. However, many existing graph-based RAG systems overlook the high cost associated with LLM token usage during graph construction, hindering large-scale adoption. To address this, we propose TERAG, a simple yet effective framework designed to build informative graphs at a significantly lower cost. Inspired by HippoRAG, we incorporate Personalized PageRank (PPR) during the retrieval phase, and we achieve at least 80% of the accuracy of widely used graph-based RAG methods while consuming only 3%-11% of the output tokens.