TAO▲$264.90 price fell more than 14% after Covenant AI, a key Bittensor AI builder, said it’s exiting over what it called “decentralization theatre.“
Covenant AI, a key developer group on Bittensor that built one of its largest AI models, said it is exiting the network after accusing co-founder Jacob Steeves of effectively being in charge of a system meant to have no single leader.
In an X post today, Sam Dare, the founder of Covenant AI, said Steeves suspended emissions to its subnets, stripped away moderation rights over its own community spaces, deprecated its subnet setup and used token sales as pressure. The team added:
“The entire premise of Bittensor, the promise that drew builders, miners, validators, and investors into this ecosystem, is that no single entity controls it. That promise is a lie.”
- Backed by Polychain, Paradigm and other VC giants, Bittensor is a blockchain built around AI work, where people join as miners, validators or subnet creators. These participants earn TAO tokens based on how well the network thinks they perform.
- The project’s own docs say subnet emissions are split 18% to the subnet owner, 41% to miners and 41% to validators and their stakers. In other words, a fight over control is also a fight over rewards.
TAO Price Drops Amid Bittensor Drama
Covenant AI is not a small side project in the ecosystem. It built one of the biggest AI models on Bittensor using a crowdsourced setup, where contributors pooled computing power instead of relying on a single company.
Dare said Bittensor promised a system where no one person is in charge. But argued recent events show otherwise, he said, pointing to actions by Steeves, including what he called “a series of actions” against Covenant AI’s operations:
“These actions include the suspension of emissions to our subnets, the removal of our moderation capabilities over our own community channels, the unilateral deprecation of our subnet infrastructure, and direct economic pressure applied through large, visible token sales timed to moments of operational conflict.”
The crypto community’s reaction was openly hostile, to say the least. Some accused Covenant AI of rugging its community or burning investor trust. Others, however, said the fight only confirmed that Bittensor’s decentralization pitch was more marketing than reality.
Shortly after the news broke, TAO plunged 14%. Meanwhile, the price of SN3, which is a token tied to Templar, the main AI-training subnet run by Covenant AI, dropped more than 55%, making it the day’s biggest loser, according to CoinGecko.
