Avalanche Treasury CEO Warns AI‑Driven Trading Could Strain L1 Blockspace

Bart Smith, CEO of Avalanche Treasury Company, told The Block that the growing use of AI agents in financial markets will challenge the assumption that blockchain blockspace is effectively unlimited.

AI agents and blockspace demand

Smith warned that even modest levels of AI‑driven activity could saturate existing L1 capacity. “There’s not enough block space. And block space is not infinite anymore,” he said at the Avalanche Summit in New York.

Layer‑1 differences become material

He noted that the technical distinctions between major L1 networks—Avalanche (AVAX), Solana and Ethereum—are currently obscured by abundant capacity, but will become significant as demand rises.

Future of traditional market trading

Smith predicts that by mid‑2027 traditional financial markets will shift to a 24‑hour, five‑day trading model. He argues that the legacy infrastructure cannot support continuous trading and that new systems will need to be built on blockchain technology.

Why Avalanche?

According to Smith, Avalanche is well‑suited for business applications that require strong privacy and security features.