diff --git a/CHANGELOG.md b/CHANGELOG.md
index e1ebd5d..1054a8a 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,5 +1,9 @@
 # Changelog
 
+## 0.3.1
+
+- Fix the OpenCode `$ARGUMENTS` token in the `plugin-compaction-init` template so it is properly substituted instead of being written into the memory file.
+
 ## 0.3.0
 
 - Auto-register a `/plugin-compaction-init` slash command that scaffolds the compaction memory file with `## Keep` and `## Discard` sections of classification rules. User-supplied arguments are appended to extend the defaults.
diff --git a/src/index.ts b/src/index.ts
index b3fd736..8e58f84 100644
--- a/src/index.ts
+++ b/src/index.ts
@@ -21,7 +21,7 @@ const initCommandName = "plugin-compaction-init";
 
 /**
  * Builds the prompt the auto-registered `/plugin-compaction-init` slash
- * command sends to the model. `$ARGUMENTS$` is left unsubstituted so
+ * command sends to the model. `$ARGUMENTS` is left unsubstituted so
  * OpenCode substitutes it at invocation time.
  *
  * @param memoryFile Literal path to the memory file, inserted verbatim.
@@ -46,7 +46,7 @@ Keep all details related to the keep topics below, and discard everything relate
 
 - Any other older discussions not mentioned above.
 
-$ARGUMENTS$
+$ARGUMENTS
 `;
 }
 
diff --git a/test/index.test.ts b/test/index.test.ts
index 52a0c4e..09f424d 100644
--- a/test/index.test.ts
+++ b/test/index.test.ts
@@ -179,10 +179,10 @@ describe("buildInitCommandTemplate", () => {
     expect(template).toContain("## Discard\n");
   });
 
-  test("leaves $ARGUMENTS$ unsubstituted for OpenCode to fill in", () => {
+  test("leaves $ARGUMENTS unsubstituted for OpenCode to fill in", () => {
     const template = buildInitCommandTemplate(".opencode/compaction.md");
 
-    expect(template.trimEnd().endsWith("$ARGUMENTS$")).toBe(true);
+    expect(template.trimEnd().endsWith("$ARGUMENTS")).toBe(true);
   });
 });
 
@@ -210,7 +210,7 @@ describe("CompactionPromptPlugin config hook", () => {
       "## Discard",
     );
     expect(cfg.command?.["plugin-compaction-init"].template).toContain(
-      "$ARGUMENTS$",
+      "$ARGUMENTS",
     );
     expect(context.logs).toHaveLength(0);
   });