MDM-Prime-v2: Binary Encoding and Index Shuffling Enable Compute-optimal Scaling of Diffusion Language Models

ArXi:2603.16077v1 Announce Type: new Masked diffusion models (MDM) exhibit superior generalization when learned using a Partial masking scheme (Prime). This approach converts tokens into sub-tokens and models the diffusion process at the sub-token level. We identify two limitations of the MDM-Prime framework. First, we lack tools to guide the hyperparameter choice of the token granularity in the subtokenizer. Second, we find that the function form of the subtokenizer significantly degrades likelihood estimation when paired with commonly used Byte-Pair-Encoding (BPE) tokenizers.