diff --git a/packages/frontend/src/layouts/IDELayout.tsx b/packages/frontend/src/layouts/IDELayout.tsx
index e06d8a0..384715a 100644
--- a/packages/frontend/src/layouts/IDELayout.tsx
+++ b/packages/frontend/src/layouts/IDELayout.tsx
@@ -5,17 +5,18 @@ import { useWebSocket } from "../hooks/useWebSocket";
 import { useTheme } from "../hooks/useTheme";
 
 const NAV_ITEMS = [
-  { path: "/", label: "Home" },
-  { path: "/editor", label: "Editor" },
-  { path: "/build", label: "Build" },
-  { path: "/server", label: "Server" },
-  { path: "/toolset", label: "Toolset" },
-  { path: "/repos", label: "Repos" },
+  { path: "/editor", label: "Editor", icon: "\u270E" },
+  { path: "/toolset", label: "Toolset", icon: "\u2699" },
+  { path: "/build", label: "Build", icon: "\u2692" },
+  { path: "/server", label: "Server", icon: "\u25B6" },
+  { path: "/repos", label: "Repos", icon: "\u2387" },
+  { path: "/settings", label: "Settings", icon: "\u2318" },
 ];
 
 export function IDELayout({ sidebar }: { sidebar?: React.ReactNode }) {
   const [terminalOpen, setTerminalOpen] = useState(false);
   const [upstreamBehind, setUpstreamBehind] = useState(0);
+  const [pendingToolset, setPendingToolset] = useState(0);
   const location = useLocation();
   const { subscribe } = useWebSocket();
   const { theme, toggleTheme } = useTheme();
@@ -30,64 +31,109 @@ export function IDELayout({ sidebar }: { sidebar?: React.ReactNode }) {
   }, [subscribe]);
 
   useEffect(() => {
-    if (location.pathname === "/repos") {
-      setUpstreamBehind(0);
-    }
+    return subscribe("toolset:changes", (event) => {
+      const data = event.data as { count?: number };
+      if (data.count !== undefined) setPendingToolset(data.count);
+    });
+  }, [subscribe]);
+
+  useEffect(() => {
+    if (location.pathname === "/repos") setUpstreamBehind(0);
   }, [location.pathname]);
 
+  useEffect(() => {
+    if (location.pathname === "/toolset") setPendingToolset(0);
+  }, [location.pathname]);
+
+  const getBadge = (path: string): number => {
+    if (path === "/repos") return upstreamBehind;
+    if (path === "/toolset") return pendingToolset;
+    return 0;
+  };
+
   return (
-    <div className="flex h-screen flex-col overflow-hidden" style={{ backgroundColor: "var(--forge-bg)" }}>
-      <header
-        className="flex shrink-0 items-center gap-6 px-4 py-2"
-        style={{ borderBottom: "1px solid var(--forge-border)" }}
+    <div className="flex h-screen overflow-hidden" style={{ backgroundColor: "var(--forge-bg)" }}>
+      {/* Left sidebar nav */}
+      <nav
+        className="flex shrink-0 flex-col"
+        style={{
+          width: "56px",
+          borderRight: "1px solid var(--forge-border)",
+          backgroundColor: "var(--forge-surface)",
+        }}
       >
-        <div className="flex items-center gap-2">
-          <img src="/layonara.png" alt="Layonara" style={{ width: "130px" }} />
-          <span
-            className="text-lg font-bold"
-            style={{
-              fontFamily: "'Baskerville', 'Georgia', 'Palatino', serif",
-              color: "var(--forge-accent)",
-            }}
-          >
-            Forge
-          </span>
-        </div>
-        <nav className="flex flex-1 items-center gap-1">
+        <Link
+          to="/"
+          className="flex items-center justify-center py-3"
+          title="Dashboard"
+        >
+          <img src="/layonara.png" alt="Layonara" style={{ width: "40px" }} />
+        </Link>
+
+        <div className="mt-2 flex flex-1 flex-col">
           {NAV_ITEMS.map((item) => {
             const isActive =
-              item.path === "/" ? location.pathname === "/" : location.pathname.startsWith(item.path);
+              item.path === "/"
+                ? location.pathname === "/"
+                : location.pathname.startsWith(item.path);
+            const badge = getBadge(item.path);
+
             return (
               <Link
                 key={item.path}
                 to={item.path}
-                className="relative rounded px-2.5 py-1 text-sm transition-colors hover:bg-white/5"
+                className="relative flex flex-col items-center justify-center py-2.5 text-center transition-colors hover:bg-white/5"
                 style={{
+                  borderLeft: isActive
+                    ? "3px solid var(--forge-accent)"
+                    : "3px solid transparent",
+                  backgroundColor: isActive ? "rgba(148, 98, 0, 0.1)" : undefined,
                   color: isActive ? "var(--forge-accent)" : "var(--forge-text-secondary)",
-                  fontWeight: isActive ? 600 : 400,
                 }}
+                title={item.label}
               >
-                {item.label}
-                {item.path === "/repos" && upstreamBehind > 0 && (
-                  <span className="absolute -right-1 -top-1 flex h-4 min-w-4 items-center justify-center rounded-full bg-amber-500 px-1 text-[10px] font-bold text-black">
-                    {upstreamBehind}
+                <span className="text-base">{item.icon}</span>
+                <span className="mt-0.5 text-[9px] leading-tight">{item.label}</span>
+                {badge > 0 && (
+                  <span className="absolute right-1 top-1 flex h-3.5 min-w-3.5 items-center justify-center rounded-full bg-amber-500 px-0.5 text-[8px] font-bold text-black">
+                    {badge}
                   </span>
                 )}
               </Link>
             );
           })}
-        </nav>
+        </div>
+
         <button
           onClick={toggleTheme}
-          className="rounded px-2 py-1 text-sm transition-colors hover:bg-white/10"
+          className="flex items-center justify-center py-3 text-sm transition-colors hover:bg-white/5"
           style={{ color: "var(--forge-text-secondary)" }}
           title={`Switch to ${theme === "dark" ? "light" : "dark"} mode`}
         >
           {theme === "dark" ? "\u2600\uFE0F" : "\uD83C\uDF19"}
         </button>
-      </header>
+      </nav>
 
+      {/* Main content area */}
       <div className="flex flex-1 flex-col overflow-hidden">
+        <header
+          className="flex shrink-0 items-center gap-4 px-4 py-1.5"
+          style={{ borderBottom: "1px solid var(--forge-border)" }}
+        >
+          <div className="flex items-center gap-2">
+            <span
+              className="text-lg font-bold"
+              style={{
+                fontFamily: "'Baskerville', 'Georgia', 'Palatino', serif",
+                color: "var(--forge-accent)",
+              }}
+            >
+              Layonara Forge
+            </span>
+          </div>
+          <div className="flex-1" />
+        </header>
+
         <div className="flex flex-1 overflow-hidden">
           {sidebar && (
             <aside