The STAR-XAI Protocol: An Interactive Framework for Inducing Second-Order Agency in AI Agents

Current Large Reasoning Models (LRMs) exhibit significant limitations in reliability and transparency, often showing a collapse in reasoning capabilities when faced with high-complexity, long-horizon tasks. This "illusion of thinking" is frequently an artifact of non-agentic, black-box evaluation paradigms that fail to cultivate robust problem-solving processes. In response, we introduce The STAR-XAI Protocol (Socratic, Transparent, Agentic, Reasoning - for eXplainable Artificial Intelligence), a novel methodology for training and operating verifiably reliable AI agents. Our method reframes the human-AI interaction as a structured, Socratic dialogue, governed by an explicit and evolving rulebook, the Consciousness Transfer Package (CTP). Through an interactive Gameplay Cycle that enforces ante-hoc strategic justification and a state-locking Checksum that prevents error accumulation, the protocol transforms a powerful but opaque LRM into a disciplined "Clear Box" agent. We demonstrate the efficacy of this method through an exhaustive 25-move case study in the complex strategic game "Caps i Caps". The agent not only solved the high-complexity puzzle but also demonstrated Second-Order Agency, identifying flaws in its own supervisor-approved plans and adapting its core integrity protocols mid-task. The STAR-XAI Protocol offers a practical pathway to creating AI agents that are not just high-performing, but also transparent, auditable, and trustworthy by design.