Avalanche Financial CEO claims AI agents will squeeze L1 block space

During an interview with The Block at the New York Avalanche Summit, Bart Smith, CEO of Avalanche Treasury Co., stated that the view that block space is not infinite will be tested as AI agents enter the financial market. He pointed out that as long as AI agent activities reach the lower end of market expectations, relevant activities will occur on the blockchain, "there is not enough block space, and block space is no longer infinite."

Smith believes that the expected demand for block space will make the technical differences between Layer 1 networks like Avalanche, Solana, and Ethereum even more important. He stated that theoretically, there are many subtle differences between these L1s, which users currently do not need to pay much attention to due to sufficient capacity, but "these differences will become important." The former executive, who worked at Susquehanna for nearly 14 years, also believes that Avalanche is best suited for business applications involving privacy and security.

Smith expects that by mid-2027, traditional financial markets will shift to trading five days a week, 24 hours a day, and existing financial infrastructure will be unable to cope with round-the-clock trading. He stated that new infrastructure must be created, and it will not be built in the old way, "but rather built on the blockchain."