From 9ac89fa6f94a6762730d894d883af239d8552af7 Mon Sep 17 00:00:00 2001
From: Ting Zhang <181050363+GPT-AGI@users.noreply.github.com>
Date: Tue, 10 Nov 2026 03:05:42 +0800
Subject: [PATCH] fix(proxy): expand nested environment defaults in proxy
 config

The example config falls back with ${OPENAI_API_KEY_2:-${OPENAI_API_KEY}}.
The old scanner stopped at the first closing brace, so an unset secondary key
stayed as the literal ${OPENAI_API_KEY} and a set key kept a trailing }.

Co-authored-by: Cursor <cursoragent@cursor.com>
---
 optillm/plugins/proxy/config.py | 36 +++++++++++++++-----
 tests/test_proxy_plugin.py      | 59 +++++++++++++++++++++++++++++++++
 2 files changed, 87 insertions(+), 8 deletions(-)

diff --git a/optillm/plugins/proxy/config.py b/optillm/plugins/proxy/config.py
index ef31cf3c..674e79d6 100644
--- a/optillm/plugins/proxy/config.py
+++ b/optillm/plugins/proxy/config.py
@@ -93,12 +93,32 @@ def _interpolate_env_vars(obj: Any) -> Any:
             Processed object with environment variables replaced
         """
         if isinstance(obj, str):
-            # Pattern for ${VAR} or ${VAR:-default}
-            pattern = re.compile(r'\$\{([^}]+)\}')
-            
+            # Match the documented ${VAR:-${FALLBACK}} form before the
+            # existing simple-variable form, so the inner } does not end the
+            # outer match.
+            pattern = re.compile(
+                r'\$\{([^{}:]+):-\$\{([^{}:]+)\}\}|\$\{([^}]+)\}'
+            )
+
             def replacer(match):
-                var_expr = match.group(1)
-                
+                if match.group(1) is not None:
+                    var_name = match.group(1).strip()
+                    value = os.environ.get(var_name)
+                    if value is not None:
+                        return value
+
+                    fallback_expr = match.group(2)
+                    fallback_name = fallback_expr.strip()
+                    value = os.environ.get(fallback_name)
+                    if value is None:
+                        logger.warning(
+                            f"Environment variable ${{{fallback_name}}} not set"
+                        )
+                        return "${" + fallback_expr + "}"
+                    return value
+
+                var_expr = match.group(3)
+
                 # Handle ${VAR:-default} syntax
                 if ':-' in var_expr:
                     var_name, default = var_expr.split(':-', 1)
@@ -106,13 +126,13 @@ def replacer(match):
                 else:
                     var_name = var_expr.strip()
                     value = os.environ.get(var_name)
-                    
+
                     if value is None:
                         logger.warning(f"Environment variable ${{{var_name}}} not set")
                         return match.group(0)  # Keep original
-                
+
                 return value
-            
+
             return pattern.sub(replacer, obj)
             
         elif isinstance(obj, dict):
diff --git a/tests/test_proxy_plugin.py b/tests/test_proxy_plugin.py
index e075221b..8ce23094 100644
--- a/tests/test_proxy_plugin.py
+++ b/tests/test_proxy_plugin.py
@@ -176,5 +176,64 @@ def test_models_endpoint_uses_proxy_providers(self):
         self.assertEqual(resp.get_json()["data"], [{"id": "local-model"}])
 
 
+class TestProxyEnvInterpolation(unittest.TestCase):
+    """${VAR:-${OTHER}} is the fallback form in proxy/example_config.yaml."""
+
+    def setUp(self):
+        self._saved = {
+            key: os.environ.get(key) for key in ("OPENAI_API_KEY", "OPENAI_API_KEY_2")
+        }
+        os.environ["OPENAI_API_KEY"] = "sk-primary"
+        os.environ.pop("OPENAI_API_KEY_2", None)
+
+    def tearDown(self):
+        for key, value in self._saved.items():
+            if value is None:
+                os.environ.pop(key, None)
+            else:
+                os.environ[key] = value
+
+    def test_nested_default_uses_the_inner_variable(self):
+        text = "${OPENAI_API_KEY_2:-${OPENAI_API_KEY}}"
+        self.assertEqual(ProxyConfig._interpolate_env_vars(text), "sk-primary")
+
+    def test_set_outer_variable_does_not_keep_a_trailing_brace(self):
+        os.environ["OPENAI_API_KEY_2"] = "sk-secondary"
+        text = "key=${OPENAI_API_KEY_2:-${OPENAI_API_KEY}}"
+        self.assertEqual(ProxyConfig._interpolate_env_vars(text), "key=sk-secondary")
+
+    def test_simple_values_and_missing_variables_stay_compatible(self):
+        self.assertEqual(ProxyConfig._interpolate_env_vars("${OPENAI_API_KEY}"), "sk-primary")
+        self.assertEqual(
+            ProxyConfig._interpolate_env_vars("${MISSING_OPTILLM_VAR:-fallback}"),
+            "fallback",
+        )
+        self.assertEqual(
+            ProxyConfig._interpolate_env_vars(
+                "${MISSING_OPTILLM_VAR:-literal{brace}"
+            ),
+            "literal{brace",
+        )
+        self.assertEqual(
+            ProxyConfig._interpolate_env_vars("x ${MISSING_OPTILLM_VAR} y"),
+            "x ${MISSING_OPTILLM_VAR} y",
+        )
+        self.assertEqual(
+            ProxyConfig._interpolate_env_vars(
+                {"api_key": "${OPENAI_API_KEY_2:-${OPENAI_API_KEY}}"}
+            ),
+            {"api_key": "sk-primary"},
+        )
+        with patch.dict(
+            os.environ, {"OPENAI_API_KEY_2": "literal-${OPENAI_API_KEY}"}
+        ):
+            self.assertEqual(
+                ProxyConfig._interpolate_env_vars(
+                    "${OPENAI_API_KEY_2:-${OPENAI_API_KEY}}"
+                ),
+                "literal-${OPENAI_API_KEY}",
+            )
+
+
 if __name__ == "__main__":
     unittest.main()