AI Agents Could Squeeze L1 Block Space: Avalanche CEO Warns

Avalanche CEO Bart Smith has expressed concerns that AI agents could strain Layer 1 block space as automated financial activity moves onchain and traditional markets adopt longer trading hours.

According to Smith, AI agents can act on instructions, interact with software, and complete tasks with limited human involvement. Applied to finance, such systems could place trades, move funds, settle payments, or manage positions, with each on-chain action competing for network capacity.

Smith argued that the resulting transaction load would challenge the common view that block space remains abundant. Existing networks can currently handle enough activity that many users do not need to consider how one Layer 1 processes transactions differently from another.

He expects traditional financial markets to move toward continuous weekday trading by mid-2027, with markets operating 24 hours a day for five days each week, extending access far beyond the sessions followed by most stock exchanges. Existing financial systems would struggle to support that schedule because much of the infrastructure depends on set operating hours and processes that were not designed for nonstop trading and settlement.