Skills vs MCP tools for agents: when to use what

A recent debate in the realm of agent-based systems centers on whether to use skills or Model Context Protocols (MCPs) for tool interaction and domain-specific knowledge access. MCPs, designed for developers, provide LLMs with third-party tools and resources through structured API calls, offering precise and predictable outcomes but requiring a higher setup complexity and facing challenges like tool discovery, unoptimized context clutter, and network latency. Skills, on the other hand, use local, natural-language instructions that are easy to set up and customize but are prone to misinterpretations and lack deterministic execution. While MCPs excel in scenarios requiring precise operations, skills are advantageous for behavioral guidance and contextual adaptation. In practice, as seen with LlamaAgents Builder, the choice between MCPs and skills hinges on the specific use case: MCPs are favored in fast-evolving contexts that benefit from a centralized and constantly updated documentation, whereas skills offer a lightweight and easily maintainable alternative when such rapid changes are not a concern.