**Implements**: [SEP-2448: server execution telemetry]
(https://github.com/modelcontextprotocol/modelcontextprotocol/pull/2448)
**Description:**
**The Observability Gap (The Problem)**
MCP clients propagate trace context to servers, but server-side
execution remains a black box. The client sees a single tools/call or
resources/read span; everything the server does (auth checks, policy
evaluation, API calls, sub-tool invocations) is invisible. In
cross-organization deployments, clients and servers use separate
observability backends with no shared collector access, making
traditional span export useless.
<img width="1015" height="450" alt="Screenshot 2026-03-23 at 3 43 21 PM"
src="https://github.com/user-attachments/assets/58c817b5-fee6-46a3-9877-d523a25368ad"
/>
**Server Execution Telemetry (The Solution)**
Servers advertise serverExecutionTelemetry and return a curated slice of
their execution spans directly in _meta.otel of the response. Clients
ingest these verbatim OTLP spans into their own collector, stitching
server-side execution into their distributed trace; no shared
infrastructure required. The black box becomes transparent.
<img width="945" height="574" alt="Screenshot 2026-03-23 at 3 43 44 PM"
src="https://github.com/user-attachments/assets/38d97c94-aa73-4e62-9b4e-3264600e5ed0"
/>
.
**Summary:**
Implement MCP serverExecutionTelemetry capability that enables
cross-organization distributed tracing by returning server-side
OpenTelemetry spans to clients inline via _meta.otel.traces.
Server-side (middleware):
- TelemetryPassbackMiddleware intercepts tools/call and resources/read
- ContextVarSpanCollector isolates span collection per-request via
ContextVar
- Propagates traceparent from client request for distributed trace
stitching
- Serializes collected spans to verbatim OTLP JSON (resourceSpans
format), directly POSTable to /v1/traces
- Top-level span filtering by default; full span tree via detailed
opt-in
- Middleware advertises capabilities via get_capabilities() on the
Middleware base class
- Provisional API: FutureWarning emitted until SEP-2448 is ratified
Client-side (reference agent):
- LangChain ReAct agent connects to MCP server via
streamable_http_client with OAuth 2.1
- Detects serverExecutionTelemetry capability at initialization
- Dynamically wraps discovered MCP tools with traceparent propagation
and _meta.otel span request
- Ingests returned server spans into Jaeger (OTLP JSON) and Galileo
(OTLP protobuf)
- Two-act demo: --no-passback (black box) vs default (full server-side
visibility)
Dependencies:
- opentelemetry-api and opentelemetry-sdk added to arcade-mcp-server
Bump arcade-mcp-server version to 1.18.0.
Versions:
* arcade-mcp\==1.0.0rc1
* arcade-mcp-server\==1.0.0rc1
* arcade-core\==2.5.0rc1
* arcade-tdk\==2.6.0rc1
* arcade-serve\==2.2.0rc1
### Summary
Adds first-class MCP support across Arcade, introduces a new MCP server
and CLI, unifies the project under the arcade-mcp name, overhauls
templates/scaffolding, and improves developer tooling, secrets
management, and examples.
### Highlights
- **MCP Server & Core**
- New MCP server with stdio and HTTP/SSE transports, session management,
resumability, and lifecycle handling.
- FastAPI-like `MCPApp` for building servers with lazy init; integrated
worker+MCP HTTP app option.
- Middleware system (logging and error handling), robust exception
hierarchy, and Pydantic-based settings.
- Async-safe managers for tools, resources, and prompts backed by
registries and locks.
- Developer-facing, transport-agnostic runtime context interfaces (logs,
tools, prompts, resources, sampling, UI, notifications).
- Conversion from Arcade ToolDefinition to MCP tool schema; OpenAI JSON
tool schema converter.
- Parser supports `@app.tool`/`@app.tool(...)` decorators.
- **CLI**
- New `mcp` command to run MCP servers with stdio or HTTP/SSE.
- New `secret` command to set/list/unset tool secrets (supports .env
input, preserves original casing for lookups).
- `new` command refactored; option to create a full toolkit package with
scaffolding.
- `chat` command removed.
- `serve.py` imports updated to `arcade_serve.fastapi.telemetry`;
version retrieval now uses `arcade-mcp`.
- `show.py` refactor to use new local catalog utilities.
- `display_tool_details` improved: adds “Default” column and handles
nested properties.
- **Configuration & Discovery**
- New `configure.py` to set up Claude Desktop, Cursor, and VS Code to
connect to local or Arcade Cloud MCP servers.
- Discovery utilities to find/install toolkits, build `ToolCatalog`s,
analyze files for tools, load kits from directories (pyproject parsing),
and build minimal toolkits.
- Better handling of provider API key resolution and evaluation suite
loading.
- **Templates & Scaffolding**
- Reorganized template structure (minimal vs full); moved
`.pre-commit-config.yaml`, `.ruff.toml`, license, Makefile, README,
tests, and tools layout to correct paths.
- Minimal template adds `.env.example` for runtime secret injection.
- Template pyproject updated for MCP servers; includes sample server
with greeting and secret-reveal tools.
- Authorization flow in templates simplified.
- **Repo-wide Renaming & Examples**
- Migrates references from `arcade-ai` to `arcade-mcp` across READMEs,
scripts, and package metadata.
- Examples updated (LangChain/LangGraph/AI SDK/TypeScript) and package
name changed to `arcade-mcp-sdk`.
- **Evals & Core Utilities**
- Evals now use OpenAI tooling format (`OpenAIToolList`, `to_openai`);
`tool_eval` takes `provider_api_key`.
- Core utilities: fixed `does_function_return_value` by dedenting before
parse; version bump to `2.5.0rc1` and dependency cleanup.
- **Tooling & CI**
- `setup-uv-env` action splits toolkit vs contrib dependency
installation.
- Pre-commit: excludes `libs/arcade-mcp-server/mkdocs.yml` and
`libs/tests/` from YAML and Ruff hooks; Ruff per-file ignores (e.g.,
C901 in `libs/**/*.py`, TRY400 in server docs paths).
- Makefile updates for uv env setup, quality checks, tests, builds, and
new `shell` target.
- Added Makefile to MCP server library to streamline dev workflow.
- **Cleanup**
- Removed `claude.json` config.
- Simplified stdio entrypoint; removed unused imports (`arcade_gmail`,
`arcade_search`).
### Breaking Changes
- **CLI**: `chat` command removed; use `mcp`, `secret`, and updated
`new`.
- **Naming**: All users should update references from `arcade-ai` to
`arcade-mcp`.
- **Templates**: File paths moved; downstream scripts referencing old
template locations may need updates.
### Getting Started
- Run an MCP server:
- `arcade mcp --stdio --toolkits your_toolkit`
- `arcade mcp --http --toolkits your_toolkit`
- Manage secrets:
- `arcade secret set your_toolkit KEY=value`
- `arcade secret list your_toolkit`
- `arcade secret unset your_toolkit KEY`
- Configure clients:
- `arcade configure` to set up Claude Desktop, Cursor, and VS Code for
local/Arcade Cloud MCP.
---------
Co-authored-by: Sam Partee <sam@arcade-ai.com>
Co-authored-by: Shub <125150494+shubcodes@users.noreply.github.com>
Sankara R. Avula