Does the description disclose side effects, auth requirements, rate limits, or destructive behavior?

With no annotations, the description carries the full burden, and it does disclose the substantive behavioral facts: the fields returned (home state, regulator, services, passporting, warning-list flag) and the paid x402 access model at 0.01 USD per call, which is auth/cost context an agent needs. It stops short of stating what happens when no company matches (error vs empty result) or whether matching is fuzzy.

Agents need to know what a tool does to the world before calling it. Descriptions should go beyond structured annotations to explain consequences.

Is the description appropriately sized, front-loaded, and free of redundancy?

Purpose and return scope are front-loaded in the opening clause, and the single trailing sentence about pricing is short and independently useful. No filler or repetition of the tool name.

Shorter descriptions cost fewer tokens and are easier for agents to parse. Every sentence should earn its place.

Given the tool's complexity, does the description cover enough for an agent to succeed on first attempt?

For a one-parameter lookup with no output schema, the description covers purpose, returned fields and access cost, which is nearly everything an agent needs. The remaining gap is the negative-result behavior — how a company with no MiCA authorisation is reported versus one that cannot be found at all.

Complex tools with many parameters or behaviors need more documentation. Simple tools need less. This dimension scales expectations accordingly.

Does the description clarify parameter syntax, constraints, interactions, or defaults beyond what the schema provides?

Schema coverage is 100% and the schema already documents the single 'name' parameter with a 3-character minimum, so the baseline is high. The description adds modest semantic value by scoping the parameter to crypto firms of three specific types (exchange, broker, custodian), which the schema does not say.

Input schemas describe structure but not intent. Descriptions should explain non-obvious parameter relationships and valid value ranges.

Does the description clearly state what the tool does and how it differs from similar tools?

The description names a concrete verb (check) and resource (MiCA CASP authorisation for a crypto company) and enumerates what is reported: home state, regulator, services, passporting and ESMA warning-list status. The entity-type parenthetical (exchange, broker, custodian) makes it easy to separate from a sibling like mica_token_status, which covers tokens rather than firms.

Agents choose between tools based on descriptions. A clear purpose with a specific verb and resource helps agents select the right tool.

Does the description explain when to use this tool, when not to, or what alternatives exist?

Usage is only implied by the phrase 'Check whether a crypto company... holds a MiCA CASP authorisation'. No alternatives are named and no when-not-to-use condition is given — e.g. it never says to prefer mica_token_status for token questions or what to do for non-EU entities. The 0.01 USD x402 note does at least flag that calls are paid, which is a real usage consideration.

Agents often have multiple tools that could apply. Explicit usage guidance like "use X instead of Y when Z" prevents misuse.