"DiscoLoop: Looping Discrete Embeddings and Continuous Hidden States for Multi-hop Reasoning" Looped Transformers can struggle to combine facts because intermediate hidden states aren't properly aligned with token embeddings. DiscoLoop fixes this by mixing decoded token embeddings back into the hidden states between loops. This boosts out-of-distribution accuracy on synthetic two-hop reasoning from below 10% to nearly 100%, while also improving real-world language modeling…