Headline: BitTensor native TAO tumbles as Covenant AI exits, accusing founder of centralized control
BitTensor’s native token TAO plunged about 18.5% in the past 24 hours after Covenant AI — one of the most visible builders on the decentralized AI network — announced it was leaving, accusing BitTensor founder Jacob Steeves of behavior that undermines the project’s decentralization claims.
What happened
- Covenant AI’s founder Sam Dare posted on X (formerly Twitter) that the firm would depart the BitTensor network, saying the project’s governance allows a single actor to “suspend a subnet’s emissions, override an owner’s authority over their own community spaces, publicly deprecate projects without process, and use token sales as a coercive mechanism to compel compliance.” He concluded: “It is centralized control with decentralized branding.”
- Dare alleged Steeves suspended Covenant’s subnet emissions (the mechanism by which TAO distributes rewards to miners and validators) and interfered with Covenant’s community channels, impairing the firm’s communication with supporters.
- Steeves denied the accusations, saying he “do[es] not have the ability to suspend emissions” and counter-accused Dare of deprecating channels and deleting posts.
Why Covenant mattered
- Covenant gained attention earlier this year for training Covenant-72B permissionlessly across 70+ contributors using commodity internet rather than massive GPU clusters — a milestone highlighted on the March All-In Podcast by Chamath Palihapitiya and discussed with Nvidia founder Jensen Huang. That publicity coincided with a roughly 50% TAO rally in late March (from about $247 on March 19 to $370 a week later).
- The firm operated three subnets on BitTensor, each focused on distinct AI tasks. Examples include Templar (SN3) for decentralized pre-training and Basilica (SN39) for decentralized compute. Taostats, the BitTensor block explorer, now lists Covenant’s subnets as “deprecated.”
Market impact and context
- TAO changed hands recently around $272.70, wiping out most of the gains tied to Covenant’s high-profile model training. The token is down roughly 64% from its all-time high of $757 in May 2024.
- The dispute spotlights a deeper risk for projects marketing themselves as decentralized: governance design and the concentration of influence can quickly become focal points for builders and investors when contentious decisions are made publicly.
What to watch next
- Whether Covenant’s deprecation is permanent or reversible, and whether other subnet operators raise similar governance complaints.
- Any formal responses or policy clarifications from BitTensor governance or Steeves that address the emissions mechanism and community-control claims.
- TAO price action and on-chain indicators for miner/validator behavior as the market digests the governance controversy.
Bottom line: The public fallout between a top subnet operator and BitTensor’s founder has triggered a sharp TAO sell-off and renewed scrutiny of how decentralized — in practice, not just in marketing — the BitTensor network actually is.
Read more AI-generated news on: undefined/news
