diff --git a/design/src/cli.ts b/design/src/cli.ts
index a5260ed70..247e308cf 100644
--- a/design/src/cli.ts
+++ b/design/src/cli.ts
@@ -393,7 +393,19 @@ async function resolveImagePaths(input: string): Promise<string[]> {
   return input.split(",").map(p => p.trim());
 }
 
-main().catch(err => {
-  console.error(err.message || err);
-  process.exit(1);
-});
+// Self-execution shortcut: when invoked with --daemon-mode, this same
+// binary runs as the persistent design daemon instead of the CLI. Keeps
+// the production install to a single executable; daemon-client.ts spawns
+// `<this binary> --daemon-mode` (or `bun run cli.ts --daemon-mode` in dev)
+// rather than relying on a separate daemon.ts file at a known path.
+if (process.argv.includes("--daemon-mode")) {
+  const { start } = await import("./daemon");
+  start();
+  // start() binds Bun.serve and registers signal handlers; this branch
+  // never falls through to main(). Process stays alive on the bound port.
+} else {
+  main().catch((err) => {
+    console.error(err.message || err);
+    process.exit(1);
+  });
+}
diff --git a/design/src/daemon-client.ts b/design/src/daemon-client.ts
index a8ed6be9b..427e81282 100644
--- a/design/src/daemon-client.ts
+++ b/design/src/daemon-client.ts
@@ -37,6 +37,7 @@ import {
   healthCheck,
   isProcessAlive,
   readStateFile,
+  readVersionString,
   resolveLockFilePath,
   resolveStartupLogPath,
   resolveStateFilePath,
@@ -216,22 +217,48 @@ export async function publishBoard(opts: PublishBoardOptions): Promise<PublishBo
 // ─── Internals ───────────────────────────────────────────────────
 
 function readPackageVersion(): string {
-  // Same lookup the daemon uses, kept independent so client + daemon agree
-  // even when the daemon's resolution path differs (different CWD).
-  try {
-    return fs
-      .readFileSync(path.join(import.meta.dir, "..", "..", "VERSION"), "utf-8")
-      .trim() || "unknown";
-  } catch {
-    return "unknown";
-  }
+  return readVersionString();
 }
 
 function defaultDaemonScript(): string {
-  // design/src/daemon-client.ts → daemon.ts is a sibling
+  // design/src/daemon-client.ts → daemon.ts is a sibling. Only used in dev
+  // when this process is `bun run cli.ts`; the compiled-binary path
+  // self-execs instead (see resolveSpawnCommand).
   return path.join(import.meta.dir, "daemon.ts");
 }
 
+/**
+ * Compute the argv to spawn the daemon. Two modes:
+ *
+ *   Compiled binary (`design/dist/design`): re-exec ourselves with
+ *   --daemon-mode. process.execPath IS the compiled design binary;
+ *   spawning it again with the flag runs the daemon (see the
+ *   --daemon-mode branch at the bottom of cli.ts).
+ *
+ *   Dev (`bun run design/src/cli.ts`): process.execPath is bun, so we
+ *   invoke `bun run <daemon.ts> --marker ...` directly.
+ *
+ * Tests can override the dev script via opts.script.
+ */
+function resolveSpawnCommand(scriptOverride: string | undefined): {
+  command: string;
+  args: string[];
+} {
+  const execBase = path.basename(process.execPath).toLowerCase();
+  const isCompiledHost = execBase !== "bun" && execBase !== "bun.exe" && execBase !== "node";
+  if (isCompiledHost && !scriptOverride) {
+    return {
+      command: process.execPath,
+      args: ["--daemon-mode", "--marker", CMDLINE_MARKER],
+    };
+  }
+  const script = scriptOverride ?? defaultDaemonScript();
+  return {
+    command: "bun",
+    args: ["run", script, "--marker", CMDLINE_MARKER],
+  };
+}
+
 interface SpawnDaemonOpts {
   script?: string;
   env?: Record<string, string>;
@@ -240,7 +267,6 @@ interface SpawnDaemonOpts {
 }
 
 async function spawnDaemon(opts: SpawnDaemonOpts): Promise<number> {
-  const script = opts.script ?? defaultDaemonScript();
   const logPath = resolveStartupLogPath();
   fs.mkdirSync(path.dirname(logPath), { recursive: true });
   // Truncate the startup log on each spawn so a later read finds only THIS
@@ -248,11 +274,9 @@ async function spawnDaemon(opts: SpawnDaemonOpts): Promise<number> {
   fs.writeFileSync(logPath, "");
   const logFd = fs.openSync(logPath, "a");
 
-  // CMDLINE_MARKER goes into argv so verifyIdentity can later match it.
-  // Without this, a future SIGTERM would have no way to confirm pid is ours.
-  const args = ["run", script, "--marker", CMDLINE_MARKER];
+  const { command, args } = resolveSpawnCommand(opts.script);
 
-  const child = nodeSpawn("bun", args, {
+  const child = nodeSpawn(command, args, {
     detached: true,
     stdio: ["ignore", logFd, logFd],
     env: {
diff --git a/design/src/daemon-state.ts b/design/src/daemon-state.ts
index a6eb83176..bb654d885 100644
--- a/design/src/daemon-state.ts
+++ b/design/src/daemon-state.ts
@@ -55,6 +55,37 @@ export function resolveStartupLogPath(): string {
   return path.join(os.homedir(), ".gstack", "design-daemon-startup.log");
 }
 
+/**
+ * Read the gstack version both client and daemon should agree on. Looks
+ * (in order): DESIGN_DAEMON_VERSION env, design/dist/.version baked at
+ * build time, VERSION at the source-tree root (dev), then "unknown".
+ *
+ * Compiled binaries lose the source-tree relative path at runtime, so we
+ * try the dist/.version sidecar (which build.sh writes) before falling
+ * back. This keeps client.expectedVersion and daemon.VERSION coherent.
+ */
+export function readVersionString(): string {
+  const env = process.env.DESIGN_DAEMON_VERSION;
+  if (env) return env;
+  const candidates = [
+    // Compiled binary: design/dist/design lives alongside design/dist/.version
+    path.join(path.dirname(process.execPath), ".version"),
+    // Dev: design/src/* → repo root is two levels up
+    path.join(import.meta.dir, "..", "..", "VERSION"),
+    // Defensive: design/dist sibling of source tree
+    path.join(import.meta.dir, "..", "dist", ".version"),
+  ];
+  for (const p of candidates) {
+    try {
+      const v = fs.readFileSync(p, "utf-8").trim();
+      if (v) return v;
+    } catch {
+      // try next
+    }
+  }
+  return "unknown";
+}
+
 export function readStateFile(stateFile: string = resolveStateFilePath()): DaemonState | null {
   try {
     return JSON.parse(fs.readFileSync(stateFile, "utf-8")) as DaemonState;
diff --git a/design/src/daemon.ts b/design/src/daemon.ts
index 6456f6eb2..8b6e4a1ed 100644
--- a/design/src/daemon.ts
+++ b/design/src/daemon.ts
@@ -33,6 +33,7 @@ import path from "path";
 import {
   CMDLINE_MARKER,
   DaemonState,
+  readVersionString,
   removeStateFile,
   resolveDaemonLogPath,
   writeStateFile,
@@ -56,18 +57,7 @@ const IDLE_CHECK_INTERVAL_MS = parseInt(
 );
 const MAX_BOARDS = parseInt(process.env.DESIGN_DAEMON_MAX_BOARDS || "50", 10);
 
-const VERSION = process.env.DESIGN_DAEMON_VERSION || readVersion();
-
-function readVersion(): string {
-  try {
-    // VERSION file lives at the repo root; design/ is one level down.
-    return fs
-      .readFileSync(path.join(import.meta.dir, "..", "..", "VERSION"), "utf-8")
-      .trim() || "unknown";
-  } catch {
-    return "unknown";
-  }
-}
+const VERSION = readVersionString();
 
 // ─── Per-board state ─────────────────────────────────────────────