AI Agents Test Blockchain Limits: Avalanche CEO Warns of Capacity Pressure
Avalanche Treasury Company CEO Bart Smith has warned that the growing use of AI agents could put pressure on blockchain capacity. He believes that as automated activity increases, network architecture will become more important for Layer 1 blockchains like Ethereum, Solana, and Avalanche.
According to Smith, the current high volume of transactions gives users little reason to focus on differences between major networks. However, if AI agents begin sending transactions at much higher volumes, this could change.
Avalanche recorded over 1,600 AI agents under the ERC-8004 standard by mid-February 2026, which can execute tasks continuously and create demand alongside traders, decentralized applications, and institutional platforms. Smith expects autonomous software to trade and complete financial tasks on blockchains, making network design more important as applications compete for limited transaction capacity.
Avalanche uses purpose-built Layer 1 networks to separate workloads, reducing competition for capacity between different applications. The company currently supports about 80 purpose-built Layer 1 chains, with projections pointing toward roughly 200 institutional networks.