diff --git a/.envrc b/.envrc
index 7b616241..f1e3a46d 100644
--- a/.envrc
+++ b/.envrc
@@ -1,2 +1,2 @@
-use nix
+use nix ./nix/shell.nix
 layout node
diff --git a/.yarnrc.yml b/.yarnrc.yml
index 07a8a70b..020e50e8 100644
--- a/.yarnrc.yml
+++ b/.yarnrc.yml
@@ -12,4 +12,8 @@ plugins:
     path: .yarn/plugins/yarn-plugin-nixify.cjs
     spec: "https://raw.githubusercontent.com/stephank/yarn-plugin-nixify/main/dist/yarn-plugin-nixify.js"
 
+# yarn-plugin-nixify options
+generateDefaultNix: false
+nixExprPath: nix/yarn-project.nix
+
 yarnPath: .yarn/releases/yarn-4.0.2.cjs
diff --git a/default.nix b/default.nix
deleted file mode 100644
index 1b4daae1..00000000
--- a/default.nix
+++ /dev/null
@@ -1,57 +0,0 @@
-{
-  pkgs ? import <nixpkgs> {},
-  accentColor ? "mauve",
-  boldKeywords ? true,
-  italicComments ? true,
-  italicKeywords ? true,
-  extraBordersEnabled ? false,
-  workbenchMode ? "default",
-  bracketMode ? "rainbow",
-  colorOverrides ? {},
-  customUIColors ? {},
-} @ inputs: let
-  inherit (pkgs) lib;
-
-  packageJSON = builtins.fromJSON (builtins.readFile ./package.json);
-  properties = (builtins.head packageJSON.contributes.configuration).properties;
-  validAccents = properties."catppuccin.accentColor".enum;
-  validWorkbenchModes = properties."catppuccin.workbenchMode".enum;
-  validBracketModes = properties."catppuccin.bracketMode".enum;
-
-  inherit (packageJSON) name version;
-  pname = "${name}-${version}";
-
-  options = builtins.removeAttrs inputs ["pkgs"];
-  project =
-    (pkgs.callPackage ./yarn-project.nix {} {
-      src = pkgs.nix-gitignore.gitignoreSource [] ./.;
-    })
-    .overrideAttrs (old: {
-      # check in the ./themes/.flag so it doesn't prompt for initial rebuilds
-      patchPhase = ''
-        printf "\n!themes/.flag\n" >> .vscodeignore
-      '';
-      buildPhase = ''
-        yarn compile
-        yarn compile:theme '${builtins.toJSON options}'
-        touch ./themes/.flag
-        yarn package
-      '';
-      installPhase = ''
-        mkdir -p $out
-        # rename the file extension to zip for the buildVSCodeMarketplaceExtension builder
-        mv catppuccin-vsc-*.vsix $out/catppuccin-vsc.zip
-      '';
-    });
-in
-  (lib.checkListOfEnum "${pname}: accent" validAccents [accentColor])
-  (lib.checkListOfEnum "${pname}: workbenchMode" validWorkbenchModes [workbenchMode])
-  (lib.checkListOfEnum "${pname}: bracketMode" validBracketModes [bracketMode])
-  pkgs.vscode-utils.buildVscodeMarketplaceExtension {
-    vsix = "${project.outPath}/catppuccin-vsc.zip";
-    mktplcRef = {
-      # lowercase since it is used in the pname
-      publisher = "catppuccin";
-      inherit name version;
-    };
-  }
diff --git a/flake.nix b/flake.nix
index 9e76c7c8..b2f9e71b 100644
--- a/flake.nix
+++ b/flake.nix
@@ -9,7 +9,7 @@
       pkgs = nixpkgs.legacyPackages.${system};
     in rec {
       default = catppuccin-vsc;
-      catppuccin-vsc = pkgs.callPackage ./. {};
+      catppuccin-vsc = pkgs.callPackage ./nix {};
     });
 
     overlays.default = final: prev: let
@@ -32,7 +32,7 @@
     devShells = forAllSystems (system: let
       pkgs = nixpkgs.legacyPackages.${system};
     in {
-      default = import ./shell.nix {inherit pkgs;};
+      default = import ./nix/shell.nix {inherit pkgs;};
     });
   };
 }
diff --git a/nix/default.nix b/nix/default.nix
new file mode 100644
index 00000000..73dbf0fd
--- /dev/null
+++ b/nix/default.nix
@@ -0,0 +1,87 @@
+{
+  pkgs ? import <nixpkgs> {},
+  accentColor ? "mauve",
+  boldKeywords ? true,
+  italicComments ? true,
+  italicKeywords ? true,
+  extraBordersEnabled ? false,
+  workbenchMode ? "default",
+  bracketMode ? "rainbow",
+  colorOverrides ? {},
+  customUIColors ? {},
+} @ inputs: let
+  inherit (pkgs) lib;
+
+  packageJSON = builtins.fromJSON (builtins.readFile ../package.json);
+  properties = (builtins.head packageJSON.contributes.configuration).properties;
+  validAccents = properties."catppuccin.accentColor".enum;
+  validWorkbenchModes = properties."catppuccin.workbenchMode".enum;
+  validBracketModes = properties."catppuccin.bracketMode".enum;
+
+  inherit (packageJSON) name version;
+  pname = "${name}-${version}";
+
+  options = builtins.removeAttrs inputs ["pkgs"];
+  src = pkgs.nix-gitignore.gitignoreSource [] ../.;
+
+  builder = pkgs.callPackage ./yarn-project.nix {} {
+    inherit src;
+    overrideAttrs = {
+      pname = "${pname}-builder";
+
+      buildPhase = ''
+        runHook preBuild
+        yarn compile
+        runHook postBuild
+      '';
+
+      installPhase = ''
+        runHook preInstall
+        mkdir -p $out
+        cp -r dist/* $out
+        runHook postInstall
+      '';
+    };
+  };
+
+  extension = pkgs.stdenvNoCC.mkDerivation {
+    inherit name version pname src;
+    buildInputs = [pkgs.nodejs pkgs.vsce pkgs.yarn];
+
+    # check in the ./themes/.flag so it doesn't prompt for initial rebuilds
+    patchPhase = ''
+      runHook prePatch
+      printf "\n!themes/.flag\n" >> .vscodeignore
+      runHook postPatch
+    '';
+
+    buildPhase = ''
+      runHook preBuild
+      mkdir -p themes dist
+      cp -r ${builder}/* dist/
+      touch ./themes/.flag
+      node dist/hooks/generateThemes.js '${builtins.toJSON options}'
+      vsce package --allow-star-activation --yarn
+      runHook postBuild
+    '';
+
+    installPhase = ''
+      runHook preInstall
+      mkdir -p $out
+      # rename the file extension to zip for the buildVSCodeMarketplaceExtension builder
+      mv catppuccin-vsc-*.vsix $out/catppuccin-vsc.zip
+      runHook postInstall
+    '';
+  };
+in
+  (lib.checkListOfEnum "${pname}: accent" validAccents [accentColor])
+  (lib.checkListOfEnum "${pname}: workbenchMode" validWorkbenchModes [workbenchMode])
+  (lib.checkListOfEnum "${pname}: bracketMode" validBracketModes [bracketMode])
+  pkgs.vscode-utils.buildVscodeMarketplaceExtension {
+    vsix = "${extension.outPath}/catppuccin-vsc.zip";
+    mktplcRef = {
+      # lowercase since it is used in the pname
+      publisher = "catppuccin";
+      inherit name version;
+    };
+  }
diff --git a/shell.nix b/nix/shell.nix
similarity index 82%
rename from shell.nix
rename to nix/shell.nix
index 3e4c4eff..d2ab8c7c 100644
--- a/shell.nix
+++ b/nix/shell.nix
@@ -5,5 +5,7 @@ in
     buildInputs = [
       nodejs
       (pkgs.yarn.override {inherit nodejs;})
+      pkgs.alejandra
+      pkgs.nil
     ];
   }
diff --git a/yarn-project.nix b/nix/yarn-project.nix
similarity index 99%
rename from yarn-project.nix
rename to nix/yarn-project.nix
index b6aad9e3..6c731a2d 100644
--- a/yarn-project.nix
+++ b/nix/yarn-project.nix
@@ -6,10 +6,10 @@
 
 let
 
-  yarnBin = ./.yarn/releases/yarn-4.0.2.cjs;
+  yarnBin = ../.yarn/releases/yarn-4.0.2.cjs;
 
   cacheFolder = ".yarn/cache";
-  lockfile = ./yarn.lock;
+  lockfile = ../yarn.lock;
 
   # Call overrideAttrs on a derivation if a function is provided.
   optionalOverride = fn: drv:
diff --git a/package.json b/package.json
index d01a5722..cfc89ac6 100644
--- a/package.json
+++ b/package.json
@@ -201,7 +201,7 @@
     "chromatic": "chromatic --exit-zero-on-changes --exit-once-uploaded --project-token chpt_e3cba49738d7554",
     "compile": "tsup",
     "compile:theme": "tsx src/hooks/generateThemes.ts",
-    "dev": "DEBUG=1 yarn build",
+    "dev": "yarn compile:theme && yarn compile --env.NODE_ENV development",
     "lint": "eslint . --ext .ts",
     "package": "vsce package --allow-star-activation --yarn",
     "postbuild": "prettier -w ./themes",
diff --git a/tsup.config.ts b/tsup.config.ts
index 96a7c98b..a473e6dd 100644
--- a/tsup.config.ts
+++ b/tsup.config.ts
@@ -1,9 +1,13 @@
 import { defineConfig } from "tsup";
 
+const dev = process.env.NODE_ENV === "development";
+
 export default defineConfig({
-  entry: ["src/browser.ts", "src/main.ts"],
+  entry: ["src/browser.ts", "src/main.ts", "src/hooks/generateThemes.ts"],
   external: ["vscode"],
-  sourcemap: true,
+  sourcemap: dev,
+  minify: !dev,
   target: "node16",
   clean: true,
+  splitting: true,
 });