diff --git a/.gitignore b/.gitignore
index 31f9ad3..85df54e 100644
--- a/.gitignore
+++ b/.gitignore
@@ -37,6 +37,9 @@ env/
 .env
 .env.local
 
+# Configuration (contains sensitive data)
+config.yml
+
 # Data
 data/
 *.db
diff --git a/README.md b/README.md
index b83b9e0..c4c848a 100644
--- a/README.md
+++ b/README.md
@@ -60,10 +60,15 @@ A lightweight, cost-conscious Discord moderation bot focused on essential protec
    cd guardden
    ```
 
-2. Create your environment file:
+2. Create your configuration files:
    ```bash
+   # Environment variables
    cp .env.example .env
    # Edit .env and add your Discord token
+   
+   # Bot configuration
+   cp config.example.yml config.yml
+   # Edit config.yml with your settings
    ```
 
 3. Start with Docker Compose:
@@ -84,10 +89,15 @@ A lightweight, cost-conscious Discord moderation bot focused on essential protec
    pip install -e ".[dev,ai]"
    ```
 
-3. Set up environment variables:
+3. Set up configuration:
    ```bash
+   # Environment variables
    cp .env.example .env
-   # Edit .env with your configuration
+   # Edit .env with your Discord token
+   
+   # Bot configuration
+   cp config.example.yml config.yml
+   # Edit config.yml with your settings
    ```
 
 4. Start PostgreSQL (or use Docker):
diff --git a/config.example.yml b/config.example.yml
new file mode 100644
index 0000000..82cf76c
--- /dev/null
+++ b/config.example.yml
@@ -0,0 +1,67 @@
+# GuardDen Configuration
+# Single YAML file for bot configuration
+
+# Bot Settings
+bot:
+  prefix: "!"
+  owner_ids:
+    # Add your Discord user ID here
+    # Example: - 123456789012345678
+
+# Spam Detection (No AI cost)
+automod:
+  enabled: true
+  anti_spam_enabled: true
+  message_rate_limit: 5      # Max messages per window
+  message_rate_window: 5     # Window in seconds
+  duplicate_threshold: 3     # Duplicate messages trigger
+  mention_limit: 5           # Max mentions per message
+  mention_rate_limit: 10     # Max mentions per window
+  mention_rate_window: 60    # Mention window in seconds
+
+# AI Moderation (Images, GIFs only)
+ai_moderation:
+  enabled: true
+  sensitivity: 80  # 0-100, higher = stricter
+  nsfw_only_filtering: true  # Only filter sexual/nude content
+  
+  # Cost Controls (Conservative: ~$25/month for 1-2 guilds)
+  max_checks_per_hour_per_guild: 25   # Very conservative limit
+  max_checks_per_user_per_hour: 5     # Prevent user abuse
+  max_images_per_message: 2           # Check max 2 images per message
+  max_image_size_mb: 3                # Skip images larger than 3MB
+  
+  # Feature Toggles
+  check_embed_images: true            # Check GIFs from Discord picker (enabled per user request)
+  check_video_thumbnails: false       # Skip video thumbnails (disabled per user request)
+  url_image_check_enabled: false      # Skip URL image downloads (disabled per user request)
+
+# User Blocklist (No AI cost)
+# Block all images, GIFs, embeds, and URLs from these users
+# Add Discord user IDs here
+blocked_user_ids:
+  # Example: - 123456789012345678
+
+# NSFW Video Domain Blocklist (No AI cost)
+# These domains are blocked instantly without AI analysis
+nsfw_video_domains:
+  - pornhub.com
+  - xvideos.com
+  - xnxx.com
+  - redtube.com
+  - youporn.com
+  - tube8.com
+  - spankwire.com
+  - keezmovies.com
+  - extremetube.com
+  - pornerbros.com
+  - eporner.com
+  - tnaflix.com
+  - drtuber.com
+  - upornia.com
+  - perfectgirls.net
+  - xhamster.com
+  - hqporner.com
+  - porn.com
+  - sex.com
+  - wetpussy.com
diff --git a/docker-compose.yml b/docker-compose.yml
index 873d963..4cfce2c 100644
--- a/docker-compose.yml
+++ b/docker-compose.yml
@@ -22,6 +22,7 @@ services:
     volumes:
       - guardden_data:/app/data
       - guardden_logs:/app/logs
+      - ./config.yml:/app/config.yml:ro
     networks:
       - guardden
     healthcheck: