Bart Smith, CEO of Avalanche Treasury Company, warned at the New York Avalanche Summit that artificial intelligence agents could sharply increase blockchain activity and challenge the assumption that Layer 1 blockspace is effectively unlimited. Smith argued that if automated agents begin generating financial transactions at scale, networks may face demand levels that make infrastructure design far more consequential. “As long as AI agent activities reach the lower end of market expectations, relevant activities will occur on the blockchain,” Smith said. “There is not enough block space, and block space is no longer infinite.”
Smith expects rising transaction demand to force users and businesses to pay closer attention to technical distinctions between Avalanche, Solana, Ethereum and other Layer 1 networks. These differences include transaction speed, fees, finality, privacy options and the ability to build systems for specific business needs. While users can overlook many of them while capacity remains readily available, Smith argued they will become important under heavier demand. He identified privacy and security as areas where Avalanche is particularly suited for business applications, citing its separate Layer 1 environments that organizations can configure for compliance needs.
Smith also projected that traditional financial markets would move toward 24-hours-a-day, five-days-a-week trading by mid-2027. He said existing financial infrastructure would struggle to support that schedule and that new systems would need to be built differently, specifically on blockchain-based rails. Longer trading hours would require clearing, settlement, collateral management and risk systems to operate continuously, and AI agents could add another layer of automated activity while markets remain open across time zones.
Avalanche has recently recorded institutional and government-related deployments. On September 14, Avalanche was selected as the underlying blockchain for the UAEPASS Digital Vault, a document service within the United Arab Emirates’ national identity platform. UAEPASS serves 12.5 million users and connects them with more than 15,000 services offered by over 350 public and private organizations. Deca4 is handling local implementation, while Ava Labs is supplying Avalanche infrastructure and technical support. In September, Hanwha Investment & Securities completed a tokenized securities platform supporting Avalanche ahead of South Korea’s planned regulated security-token market, which is scheduled to take effect in February 2027.
Avalanche’s tokenized real-world asset activity has also expanded. In July, its distributed tokenized real-world asset value reached $2.1 billion after rising 60.47% over 30 days, according to RWA.xyz data cited in connection with an $11 billion tokenization deal with Bridgetower. Bridgetower said it had placed more than $11 billion in production-linked assets on Avalanche using Chainlink infrastructure, and BlackRock’s BUIDL tokenized U.S. Treasury fund had passed $900 million on Avalanche. Franklin Templeton and VanEck have also used or announced plans involving Avalanche-based products.
Avalanche Treasury Company began trading on Nasdaq under the AVAT ticker in June through a merger with Mountain Lake Acquisition Corp., a SPAC, in a transaction valued at about $675 million. At its Nasdaq debut, the company held roughly 15 million AVAX, equal to about 3.5% of the token’s circulating supply at the time. AVAT closed 38.13% lower at $1.85 in its first trading session after opening at $2.99, with trading volume near 497,580 shares and a market value near $486.37 million. Smith has said the company is an ecosystem investment vehicle rather than a passive token holder, though its financial position remains exposed to AVAX price movements.
Before leading Avalanche Treasury, Smith worked at Susquehanna for nearly 14 years and held roles tied to institutional trading and digital assets. His broader thesis is that growing demand from AI agents and longer traditional trading hours will expose the practical limits of blockchain capacity and make Layer 1 design choices increasingly visible to businesses deciding where to run applications that require continuous activity, privacy, security and reliable transaction processing.
