Why Avalanche Wins - TOKEN2049 Singapore 2025

So, we've got the last panel of the day and we're here to talk about Avalanche and it's a big day for Avalanche cuz they just announced this morning, actually last night US time, the closing of the Avalanche Treasury company, which is a $670 million DAT of which Bart Smith is a CEO. Bart, congratulations. Congratulations to you as well, Goon. Quick disclosure, we're investors. We're also So, both Goon and I are on the advisory board of this DAT, but you really pulled this off in the twilight of the DAT mania.

I know that it's been very, very difficult as of late for a lot of these DATs to get off the ground. Tell us what that was like and how you pulled together 670 million.

Well, it was a good story, right? And so, I think that as we went out and went to investors, a thing that I found, you know, very encouraging, even as, you know, as you say, it was kind of in the waning, the waning days of that, you know, the the traditional investors really were receptive to the story that, you know, when people think about blockchain and investing in blockchains, they generally think about them, you know, for their network effects or maybe as an operating system, you hear oftentimes people talk about Microsoft as a comparable to some of these blockchains. And while I believe that that's true in the case of Avalanche, the way that we really positioned it is as enterprise software. This is the software that people are going to they're going to implement into their companies to make them more efficient and make them run faster. And the same way that Oracle was kind of the the baseline database that every company built on in the '80s and '90s and then over time as those businesses built on top of it, steering away from that becomes very difficult, becomes very sticky.

And so, we view that this opportunity with Avalanche on the business side as business software and this is the opportunity that people want to invest in and and you know, institutional investors were very receptive to that message.

So, for a lot of those investors you were pitching, they're kind of exhausted with all the dots. They're like, "Okay, yeah, I've heard a gazillion of these." What what what do you feel like was the What was the kernel that really shown through to them?

Well, I think people understood that there's you know, the same way that an ETF is not good or bad, it is just a wrapper, that a digital asset treasury is just a wrapper. And whether it's good or bad is you know, what you put in it and how you manage it. Uh we went a little bit of a different route, you know, we didn't take an existing operating company and then just try to get it up like a pipe and put it in there. You know, we we we went to this back route, so we're we're building a company from scratch. We're called the Avalanche Treasury Company.

We don't have some other kind of you know, the existing business that was probably failed uh that has nothing to do with what we're focused on. You know, when you look at the name of the company, it just says it out there. And so, the idea that this was a long-term, you know, uh permanent capital vehicle that was going to be able to take you know, that capital and invest it into the Avalanche ecosystem. I I think I think the thing that resonated the most though, Haseeb, was that you know, every other industry was allowed to go to the capital markets and raise money this way, right? Software, uh internet, telecom, they built a company, they issued debt, they issued convertible bonds, they issued equities, they met investors where they wanted to be you know, met.

And then you take that capital, you invest in this enterprise, and if the enterprise does well, the bondholders and the equity holders do well. You know, for a variety of reasons that are very well documented at crypto conferences, you know, this particular industry was not allowed to benefit from that. And so, this is really a rectifying, you know, of the kind of the Gary Gensler era, you know, construct of not being able to go to the public markets. And I think when you put it in those terms, uh investors, you know, thought that this is something that they'd want to take a look at.

So, that makes you now the Michael Saylor of Avalanche. Do you feel up to the task?

Uh I do. I I I think, you know, I I think, you know, I spent the last 20 years in traditional finance in a variety of different roles. You know, we do I was offered the opportunity to do two or three of these other ones. I I chose Avalanche because I felt like it was you know, the best you know, the best opportunity out there. In the previous round the last raise they did the previous firm I was at we were one of the largest investors in Avalanche alongside Dragonfly.

And so you know, I I when they I was approached about it I said that this is something for this next phase. If you really believe that regulation and clarity has is going to allow people to implement blockchain technology. There's no other you know, there's no other blockchain that I'd want to work with and support than this one.

So again, this is a big step of validation for what you ultimately built all those years ago when you started building Avalanche.

Huge.

And um you know, when when you started so if you rewind the clock back like what it was 7 years ago and I actually invested in the very first round when you were pitching Avalanche. And at that time you were still a professor at Cornell.

I was.

Crypto was still a little baby and what we were doing was all you know, we were sort of weirdos working on white papers and and um what is what has it been like for you to personally have gone on that journey from kind of called bad boy professor to now becoming the steward of a of a top 20 protocol?

So it's been up and down. We've lived through a crazy crazy crazy journey all together. I think a lot of the audience has as well. It started out as a technological idea. It started out as mostly a geeky project and it started out with this very cool insight that we could achieve consensus super super fast and and also a belief that the world could not be accommodated on a single chain.

That we had to build multi-chain systems. That we had to build bespoke chains for different use cases. So, that's how it got started and I remember trying to motivate my student and co-founder Kevin Sekniqi. He was He was trading coins and I was like, "Come, let's let's like let's work like you should be working on the on the on the software." And I was telling him it could be worth a billion dollars.

And he makes fun of me today. It's like much much much bigger than that. And and it's been a crazy journey all throughout. We I think we've all lived through the regulatory attacks. We lived through uh the the technical gobbledygook phase of blockchains.

We lived through selfie phase of blockchains. We lived through political proximity phase of blockchains. And but now we're at the capital formation stage and now you're seeing the that take place with the kinds of high-quality efforts that you're seeing from from the Avalanche Treasury Company and others. And and now I think it's going to be show me the money. Show me the actual actual deployments phase of blockchains and I can't be more excited about what's to come.

Okay, so speaking of show me the deployment, a lot of what we've seen over the last year is more and more companies and enterprises jumping in the space, building their own blockchain. Some of the largest fintechs in the world are now saying, "Hey, I'm late. I need to figure out a solution here. In In the early days, the story of Avalanche as I remember the two of us talking about it was mostly about technology. And today, what you can see is that the market is very very clear.

We're past talking about technology. We're here to talk about use cases. We're here to talk about adoption.

Yeah.

So, talk to me about what you guys are doing on the adoption side, particularly around enterprises and working with some of these big companies on Avalanche.

We're at the forefront of institutional adoption. I think one of the critical decisions I made, it's a small decision, but it was been instrumental to our success, was to move the company to New York. It's the most scrutinized piece of real estate, the most regulated piece of real estate, but it's also the one that's closest to real assets. As a result of this, we've been in in close contact even through the depths of the bear market with institutions that have real-world assets that want to deploy them with people who want to build innovative applications that are transparent, auditable, and open to the public. And so, those are all blockchain use cases where people want to deploy their own chains.

So, um if I were to go into the full details of of everything that we're doing, we we would be here for hours. But, I'll give you a couple of vignettes. Um just uh very recently, Toyota announced that they're they'll be building multiple L1s uh on Avalanche uh to to to track the entire life cycle of their vehicles. So, just from the uh the point of uh of purchase for retail, the way you get in line to buy a Toyota vehicle will be an NFT on a particular L1. Uh tracking of vehicle upkeep, etc.

, will be on separate uh chains. And so, these are all things that you can't do on a single chain system. So, a single chain system like Ethereum and Solana would be would fill up if they were to handle all of the world's transactions. But, with our architecture, they can do this. So, Toyota is going to be using Avalanche for exactly this purpose.

Uh there are many other cases uh many other examples uh top of mind are uh highly highly demanding applications like games. So, Off the Grid is a game I happen to play and uh get killed quite often. I'm sure there are some of you in the audience if if you've played the game, you might have killed me in it. But, um uh but Off the Off the Grid is a fantastic uh first-person shooter game. And uh and every time you kill someone and steal their arm or steal their leg or steal their armor or guns, that's an NFT transaction.

And you don't even get to notice that you're using Avalanche. It's that blazingly fast. And uh and then of course, there is the institutional work that's happening because we're on Wall Street with Consortia uh to digitize their real-world assets, to build walled gardens for them where appropriate, and uh to open up trading to all, and to op- build open systems. I remember when I was a grad student, and uh I tried to get access to NASDAQ data, and and it cost 150,000 per year to get a seat at the table. Now, it's all open.

Any one of you can script these these systems. Any one of you can participate on a on a first first-level basis along with ginormous financial giants, JP Morgans, et cetera, of the world. And we're very, very proud of what we're building.

So, you talk to a lot of these very large institutions that are trying to figure out, "Hey, what's my blockchain strategy?" And when you're talking to these institutions, what do you see in terms of how the vibe has shifted over the last year or 2 years?

So, the vibe has has I think I think the audience Well, this audience might not be aware of what has happened in the United States as much. So, we went from the initial phases when we started like 6 years ago, I would have to explain to people what a private key is, what what a how a blockchain actually works, what a consensus protocol is, and so forth. I would say about right before the FTX crash, that's when everybody knew. Like when we would go in and they'd be like, "Oh, we understand how this stuff works. We are ready.

We're itching to go." FTX crash set us back the entire space back a couple of years, and then the regulatory uncertainty had everybody sitting on the sidelines. They understood. They knew it was inescapable. And but it was a career risk for people.

Now, it's just you know, just call after call after call of people with very interesting use cases. And essentially, I think the insight is simple. Assets want to be digital. And trading platforms want to be global. And the only way to do this with today's technology with with the best of today's technology is through blockchains, high-performance blockchains, with bespoke blockchains like the ones we offer on Avalanche.

So, we've got a lot of inbound calls coming.

That makes sense. And so, Bart, given that you're kind of bringing the Wall Street crowd more closer field into what's happening in Avalanche. What besides just capital accumulation do you feel like is in the scope of possibility for a DAT like Avalanche Treasury Company?

Yeah, and what we're trying to what we're trying to provide is like a holistic exposure to the growth opportunity around the Avalanche chain. And what you see in a lot of other kind of opportunities is that not all of that benefit accrues solely down to the token itself. There are are you know, there are definitely builders on top of that that have enterprises that might have a different token that's you know, that that's on an L1. And so being able to beyond staking and liquid staking, but this this this treasury company will have the ability to to add capital back into in the form of TVL to new protocols that are being built on top of the those L1s. Uh we'll be able to do staking or uh validation.

So we'll be doing running nodes so that these new L1s that are building on that they have they have someone that they can work with. And there's going to be our ability to kind of directly invest into some of those companies and take equity positions. And this will probably be a very small sleeve of the total kind of uh the total treasury, but we believe over time that small sleeve might be able to provide outsize returns that will really kind of represent all of the business activity that's happening on in the ecosystem and not just accruing just down just to the token.

So, let's also take the counterpoint. Right? So the the classic monolithic blockchain is Solana. Gigantic boxes, big servers, like vertical scaling. And what Solana might say in response to something like Avalanche is like, "Okay, well, it doesn't really make sense for every chain or every every company to have its own chain.

Shouldn't there be one big mega chain that we all work on together? Um aren't you just causing fragmentation?" What do you say in response to somebody with that challenge?

So, uh no. First of all, it doesn't make sense from a technological perspective. Uh the moment you you jam-pack everything onto the same chain, then you start creating bottlenecks and you start driving fees up. Congestion on your application should not drive the cost of access for my users. And so that false sharing is what causes Ethereum fees to spike to $500.

That's what causes Solana to stop working every now and then because of congestion on one app affecting the entirety of the chain. So there is that alone. There is the second aspect of this which is legal and geopolitical concerns. If you look at a country like Korea or Singapore or wherever else, pick your EU. Each and every one of these jurisdictions has its own rules and for good reason.

And so they need bespoke chains that actually enforce their own validation rules that are not going to be the same as each others. And there are very good reasons to want to have your data housed on on prem, on site, or in country. There are very good reasons to have data access restrictions or to locate all your validators in certain areas. So as a result you need different structures for different use cases. So that's the start with.

And uh and I think if you think about what's happening on top of Avalanche as a result, we're seeing these seeing wholesale countries explore how an L1 for their use case might look like. We're seeing consortia come in and say, "Look, we have unique requirements ourselves." We're seeing IoT examples for example where where people want to have, "Look, I have very very low energy requirements, very very low cost requirements. And to accommodate these I need something different than the default. One size does not fit all."

So if that if you can believe you believe that, then the play is Avalanche.

One of the one of the things I'd like to add there that was important in the conversations that I have with people over the course of the last month or so is that corporations and businesses do not want to take their customers private information and put it on a public blockchain, right? They they they do care about KYC and AML. So they want to build a stack where they can customize their ability to have their customers information on there to KYC people where they can own the entire economic stack from top to bottom and to customize the chain that to meet their individual kind of business needs. And I think that that was something that resonated over and over to me in those conversations that that you just can't get, you know, in any of the comparable chains out there.

Okay, so we're we're definitely seeing this accelerating trend of more and more companies coming on chain, more and more companies launching their own chains. What's the end game? Are we literally going to see every company have its own blockchain? Or like do you expect that it's going to be large companies that have their own chains? What what do you imagine let's say 5 10 years in the future?

So, that that's the second second half of the answer to your previous question as well. So, what does this look like in the end? Is it going to be completely fragmented? Does Does having all these chains means that we break up what we have the the beautiful single chain abstraction. If you do it right, no.

If you do it wrong, it can. So, that's a legitimate concern. And what we did from the get-go in Avalanche is make sure that these L1s are interoperable. It's trivial to be able to send a message from one chain to another. When our chains need to communicate, we have all of the facilities to make that happen.

The liquidity hubs will take place. At the moment, we're seeing the C-Chain emerge as the big global liquidity hub. Many people are launching their own chains, but their tokens are traded on the C-Chain, globally accessible to all, very very easy to access with any Avalanche wallet. So, what we're going to find I think is the the the highly valuable assets will be traded, located, borrowed against, etc. subject to, you know, put in lending protocols and so forth on big liquidity hubs like the Avalanche C-Chain.

And we will see a a whole bunch of L1s carry out the day-to-day transactions and and shed offload from the main liquidity hubs.

The idea is that even if there are many different companies that have their own L1s, it's going to feel seamless from a user perspective.

Yes, it's many chains working as one. It's an ensemble of chains working in parallel and communicating as necessary. And to the user, it should be seamless.

Fair enough. So, let me let me maybe zoom in a little bit on on you personally. So, you've been the spiritual leader, the kind of heart and soul of Avalanche now for 7 years. Uh crypto has changed so much since then. I'm sure your team has evolved.

Uh what gives you the energy to keep doing this? Cuz crypto is relentless. You've been through a lot of over the last 7 years of building this thing. What what fundamentally motivates you?

So, I wake up every morning just driven to show the world how it's done. And I always was a competitive person. I always was like, "Yeah, you know, let me let me see what the game is. How do you guys play this game? What are the rules?

Let me show you how how we can do it better." And and I keep hearing from all these other chains like, "Oh, this is a chain for banking." Except I can't find a single bank where that chain is used. Or I keep hearing from people it's like, "Oh, this is like, you know, it's got all the technical gobbledygook." And I look into it and, you know, I I worked as a professor at Cornell for 19 years.

I understand the technical gobbledygook very, very well. And I'm not afraid of Greek letters. I've written papers where I ran out of Greek letters and had to use additional alphabets. So, So, I look at these things and I see a whole bunch of hollow hollow talk. So, what what gets me out of the bed is is the desire to show the world how it can be done.

And I think one of the best examples was off the grid. Like, we showed the world how on-chain gaming can be. It It doesn't need to be a Ponzi. Web3 gaming need not suck. It doesn't need to be boring.

It doesn't need to be bad. It doesn't need to have some financial Ponzi-esque elements in it. It can be a great game with with a with a blockchain behind it. And I plan to do the same thing in every other aspect in every other financial rail. So, that's what gets me going.

So, if I can summarize, it's the distinct pleasure of destroying your enemies that gets you out of bed.

But, they're also my friends.

Oh, your friends, too. Okay, okay.

No, but it's showing the world how things are how much better things are.

Okay, fair enough. Fair enough. When when will you say, "You know what? I've done it. Avalanche is built.

I did the thing. It's time to ride off in the sunset."

So, I personally think that it's probably never. So, I come from a long line of people who who died working. So, but but I do have some gauges for the audience to use. I think we are as a space still in the capital formation phase of the game. And we will know that that phase is over when the number one token is a stable coin.

Not BTC. And uh

Why do you say that?

Because that's when when there's sufficient capital on chains to overpower and and and and exceed the amount of capital kept on native tokens. So, that's I think our first sign of maybe the first phase is over. Until that point, I think we're in the early stages. For me personally, I want to see Avalanche in the number one position. And and I can't wait to see the days when you know, when BTC minor rewards, for example, go down and the security budget is is threatened and so on.

So, I think there's a lot of a lot of interesting things to come in the future.

So, you want Avalanche to overtake Bitcoin?

Why not?

What what year do you think that happens?

Uh about 12 years from now is a good mark.

12 years from now?

12 years from now, we're going to see where the Bitcoin price is and

Bold price prediction.

what the security budget is.

Got a nice little applause applause break from the audience. Okay, you know what? I'll I'll let that I'll let that stand and hopefully people can dive into that later. Let me let me ask you then, we're we're running up on time pretty soon, but what do we have to look forward to within the Avalanche ecosystem? You're not only the the leader of Avalanche, you're also the technical mind behind a lot of what goes on the ecosystem.

What do we look forward to in the Avalanche ecosystem aside from this this enterprise build out?

Okay, well, so on the technical side, if I can get wonky for a second. So, I've been personally working on the how to make nodes go much faster. Almost everybody in the space is using very very old databases and very very decrepit execution technologies. So, we're doing two big things that are coming up soon. We have a graphite release that's going to introduce some of it then there's going to be another release after that.

But, the two things we're introducing at the node level is a new database called firewood that is built for cryptocurrency use cases that is optimized for the kinds of workloads that we see in crypto as opposed to the kinds of workloads that traditional DBMS systems used to use. That's one. We're speeding things up by taking advantage of micro parallelism. Avalanche already is quite fast because it takes advantage of macro parallelism, but we're also introducing some additional asynchronous execution techniques to speed our engines up. In addition to that, I'm working I've been working on how to improve the user experience.

I think those of you How many of you here have used DeFi? Let's see. See, this is it's an insanely low number. That that's you know, it's got to be every hand up, right? How many people have used banking services?

I'm sure all of you have a bank, right? So, it's that number has to match. Those two numbers have to match. And DeFi is is exceedingly difficult So, we have a wallet that whose vision is to serve as a command center so that you never have to leave the wallet. You just go in there and you carry out all DeFi activities from within a single console.

So, I'm working personally on that front. And and of course on the BD side, we're working relentlessly on on all of these fronts with financial institutions, with non-financial institutions to bring real-world assets on chain.

Okay, last question as we're closing this out. You and I have talked a lot about AI over the years and I know it's been a a deep interest of yours as well as a subject of much of your research before coming into Avalanche. Um how do you think AI is going to affect our experience of crypto in let's say 5 to 10 years?

So, um I I actually gave a talk on this about 3 years ago before anybody else did and I introduced something called coin operated agents. And we don't have enough time to go into all the details, but one one thing that we are also working on that I should have mentioned uh is a chain where the native language parsed by the chain is actual native human languages. So, there is essentially a chain where the the validators all have LLMs inside and you interact with the chain in your own native language. So, you can say something like I would like to borrow against my holdings of BTC so many so much stablecoins, etc. Or I would like to define a lending service where token A is traded against token B.

And you specify this in English. Or with a much simpler example, I would like to give to your to towards you I would like to donate $5,000 towards your movie making effort assuming you can raise $5 million by by October. Right? So, and you write this out in English or you specify it in Tagalog or whatever language makes sense for you and the the AI engine interprets this. So, we were what the very forefront of this.

We're waiting for the LLM technology to to mature a little bit because if you deploy this right now people are going to use are going to lose a lot of their their capital. But but we're we're very excited about this. I think this is one of the the best uses of AI as applied to to blockchains. There's easier use use cases that we've seen. We've seen agents attached to the chain at an address.

That's a simpler way to sort of approximate this idea, but I don't like that as much because it's not decentralized. You're still trusting other entities. So, this is the the the non-trust requiring the decentralized version of that vision. So, I'm excited about this um and many other use cases of AI and blockchain. Uh you know, there are many others that we're going to see.

We're going to see blockchains used to store provenance data, etc. Uh and and to to verify the results produced by by AI. Um but, you know, so we'll see we'll see how this plays this space pans out.

Very good. Well, the future's bright, but we are up on time. Thank you to these two gentlemen for a very excellent discussion.