This video explains Warp's project rule files (warp.md) that eliminate hallucinations by providing consistent project context to AI agents. Instead of re-explaining your setup each time, you document it once in a markdown file that gets prepended to every prompt. The video walks through a real example with an Astro/React/Firebase project, showing best practices like keeping files lean, treating them as living documents, and using subdirectory-specific rules for monorepos. Tips include optimizing large rule files through prompt optimizers to maintain effectiveness while conserving tokens.