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+# rawk v2.0.0 - Current State Documentation
+
+## 🎯 Project Overview
+
+**rawk** is a functional programming language that compiles to standard AWK. It provides a cleaner, more structured syntax for AWK development while maintaining full compatibility with existing AWK code.
+
+## 🏗️ Architecture
+
+### Multi-Pass Compiler
+The current implementation uses a robust multi-pass approach:
+
+1. **Pass 1**: Collect all source lines into memory
+2. **Pass 2**: Detect and validate RAWK blocks
+3. **Pass 3**: Extract function definitions from RAWK blocks
+4. **Pass 4**: Generate output (standard library + user functions + main script)
+
+### Key Benefits
+- **No variable scoping issues**: Eliminates AWK's variable scoping problems
+- **Predictable parsing**: Each pass has a single responsibility
+- **Easy to extend**: New features can be added as new passes
+- **Robust error handling**: Clear, actionable error messages
+
+## 📝 Language Specification
+
+### Block-Based Structure
+```rawk
+BEGIN {
+    print "Initialization"
+}
+
+RAWK {
+    $add = (x, y) -> {
+        return x + y;
+    };
+    
+    $multiply = (a, b) -> {
+        return a * b;
+    };
+}
+
+{
+    result = add(5, 3);
+    print result;
+}
+```
+
+### Function Definitions
+- **Location**: Only inside `RAWK { ... }` blocks
+- **Syntax**: `$name = (args) -> { ... }` (braces required)
+- **Arguments**: Comma-separated list in parentheses
+- **Body**: Multi-line block with explicit `return` statements
+
+### Function Calls
+- **Location**: Anywhere in regular AWK code
+- **Syntax**: `function_name(arg1, arg2, ...)`
+- **Scope**: Functions are globally available after definition
+
+### Standard Library
+Currently includes basic testing functions:
+- `assert(condition, message)`
+- `expect_equal(actual, expected, message)`
+- `expect_true(condition, message)`
+- `expect_false(condition, message)`
+
+## 🔧 Implementation Details
+
+### File Structure
+```
+rawk/
+├── rawk_block_based.awk    # Main compiler (multi-pass)
+├── rawk.awk                # Original implementation (reference)
+├── scratch/                # Archived experimental versions
+├── tests/                  # Test suite
+├── simple_test.rawk        # Basic test case
+└── example.rawk           # Example usage
+```
+
+### Compilation Process
+```bash
+# Two-stage compilation (recommended)
+awk -f rawk_block_based.awk input.rawk > output.awk
+awk -f output.awk input_data.txt
+
+# One-stage compilation and execution
+awk -f rawk_block_based.awk input.rawk | awk -f - input_data.txt
+```
+
+### Error Handling
+- **Missing RAWK block**: "Error: No RAWK block found"
+- **Nested RAWK blocks**: "Error: Nested or multiple RAWK blocks are not supported"
+- **Unclosed RAWK block**: "Error: RAWK block opened at line X but never closed"
+- **Invalid function syntax**: Detailed error messages with suggestions
+
+## ✅ What's Working
+
+### Core Features
+- ✅ Block-based function definitions
+- ✅ Multi-line function bodies
+- ✅ Function extraction and generation
+- ✅ RAWK block validation
+- ✅ Basic error handling
+- ✅ Standard library generation
+- ✅ Clean output generation
+
+### Test Cases
+- ✅ Simple function definition and call
+- ✅ BEGIN block integration
+- ✅ Main block execution
+- ✅ Function return values
+
+## 🚧 What's Missing
+
+### Smart Standard Library
+- **Current**: Always includes all standard library functions
+- **Goal**: Only include functions actually referenced in the code
+- **Implementation**: Need to track function calls and analyze dependencies
+
+### Enhanced Error Handling
+- **Current**: Basic error messages
+- **Goal**: Comprehensive validation with line numbers and suggestions
+- **Missing**: Function call validation, argument count checking
+
+### Function Call Rewriting
+- **Current**: Function calls are passed through unchanged
+- **Goal**: Rewrite function calls to use internal names (like original rawk.awk)
+- **Benefit**: Better error handling and potential optimization
+
+### Extended Standard Library
+- **Current**: Basic testing functions only
+- **Goal**: Full standard library from original rawk.awk
+- **Includes**: Array utilities, functional programming, predicates, etc.
+
+### Documentation and Examples
+- **Current**: Basic examples
+- **Goal**: Comprehensive documentation and test suite
+- **Missing**: Migration guide, best practices, real-world examples
+
+## 🎯 Next Steps Plan
+
+### Phase 1: Core Improvements (Immediate)
+1. **Function call analysis**: Track which functions are actually used
+2. **Smart standard library**: Only include referenced functions
+3. **Function call rewriting**: Use internal names for better error handling
+4. **Enhanced validation**: Check function calls exist, argument counts match
+
+### Phase 2: Standard Library (Short-term)
+1. **Port full standard library**: Array utilities, functional programming, predicates
+2. **Smart inclusion**: Only include functions that are actually used
+3. **Documentation**: Document all available standard library functions
+
+### Phase 3: Developer Experience (Medium-term)
+1. **Better error messages**: Line numbers, context, suggestions
+2. **Warning system**: Non-fatal issues that should be addressed
+3. **Debug mode**: Verbose output for troubleshooting
+4. **Test suite**: Comprehensive tests for all features
+
+### Phase 4: Advanced Features (Long-term)
+1. **Import system**: Include other rawk files
+2. **Type checking**: Basic type validation
+3. **Optimization**: Code optimization passes
+4. **IDE support**: Language server, syntax highlighting
+
+## 🔍 Technical Decisions
+
+### Why Multi-Pass?
+- **Problem**: AWK variable scoping issues made single-pass parsing unreliable
+- **Solution**: Multi-pass eliminates state management complexity
+- **Benefit**: More robust, easier to debug and extend
+
+### Why Block-Based?
+- **Problem**: Original syntax was ambiguous and hard to parse
+- **Solution**: Explicit blocks make parsing deterministic
+- **Benefit**: Clearer code structure, better error messages
+
+### Why Braces Required?
+- **Problem**: Optional braces made parsing complex
+- **Solution**: Always require braces for function definitions
+- **Benefit**: Simpler parsing, clearer code, fewer edge cases
+
+## 📊 Success Metrics
+
+### Current Status
+- ✅ **Compilation**: Works correctly for basic cases
+- ✅ **Function extraction**: Properly extracts and generates functions
+- ✅ **Error handling**: Basic validation working
+- ✅ **Output quality**: Clean, readable AWK code
+
+### Target Metrics
+- **Test coverage**: 90%+ of language features tested
+- **Error messages**: 100% actionable with line numbers
+- **Performance**: Compilation time < 100ms for typical files
+- **Compatibility**: 100% compatible with existing AWK code
+
+## 🎉 Conclusion
+
+The multi-pass block-based approach has successfully solved the core technical challenges. The implementation is now robust, maintainable, and ready for enhancement. The foundation is solid for building out the full feature set.
+
+**Next immediate step**: Implement function call analysis and smart standard library inclusion. 
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