Covenant AI Leaves Bittensor Amid Decentralization Concerns, TAO Drops 18%
Bittensor subnet developer Covenant AI said Friday that it is leaving the decentralized artificial intelligence network, accusing Bittensor of operating under a concentrated governance structure that undermines its decentralization claims.
In a Friday post on X, Covenant AI founder Sam Dare said the team could no longer build on or raise for Bittensor because its governance was not meaningfully distributed.
โIt is decentralization theatre,โ Dare said. โJacob Steeves maintains effective control over the triumvirate, resists any meaningful transfer of authority, and deploys changes unilaterally whenever he chooses, without process and without consensus.โ
The dispute cuts to the core of Bittensorโs decentralization pitch. Covenant AI alleged that founder Jacob Steeves, known as Const, exerts outsized influence over governance and network operations, an accusation Steeves denied.
Bittensorโs governance documents describe a transitional system in which a โTriumvirateโ of Opentensor Foundation employees holds root permissions alongside a senate, rather than a fully open governance model.
Covenant AI claims subnet emissions were suspended, Bittensor founder denies allegations
Covenant AI said Steeves had taken several actions against the project in recent weeks, including suspending emissions to its subnet, restricting moderation powers in community channels and applying โdirect economic pressureโ through visible token sales during the dispute.
Steeves rejected the allegations, claiming that he cannot suspend subnet emissions and that he does not hold โany privilege beyond what normal TAO holders have.โ
In a Friday X response, Steeves said he sold some of his โalpha holdings on his three subnets because they were not running and were on near 100% burn code,โ which changed the emissions the same way โall buys and sells on Bittensor do.โ
Steeves also denied stripping Covenant AI of its moderation rights, saying he only temporarily removed the teamโs ability to delete posts before restoring it. He added that large token sales would have been visible onchain.
โNot large. Less than 1% of what i had invested in his teams. Visibility is impossible to avoid in my position. I reserve my right to buy and sell tokens which is what underpins the entire system of dTao,โ he added.
Bittensor previously garnered mainstream attention after Nvidia CEO Jensen Huang praised the decentralized training run on Bittensor Subnet 3, calling Covenantโs milestone of pre-training the largest decentralized LLM a โremarkable technical achievement,โ during the All-In Podcast on March 19.
Related: Bittensor’s TAO price may plunge 40% within five weeks: Fractal data
TAOโs sales volume skyrockets ahead of Covenant AIโs departure announcement
The governance dispute also weighed on Bittensorโs (TAO) token, which was down around 18% over the previous 24 hours as of Friday morning, according to market data.
However, sell volume on TAO rose to its highest level since December 2024, about 24 hours before Covenant AI announced its departure. โIf you think thatโs a coincidence, you donโt understand the game youโre playing. This was a calculated exit and execution,โ wrote crypto analyst Ardi in a Friday X post.
Cointelegraph reached out to Covenant AI and Bittensor for comment but had not received a response by publication.
The dispute raises wider concerns for projects striving for decentralization, according to David and Daniil Liberman, co-creators of the decentralized layer-1 blockchain Gonka protocol.
โDecentralized networks that want serious builders have to answer one question: can the infrastructure you build on be used against you? If the answer is yes, the decentralization is cosmetic,โ they told Cointelegraph.
Magazine: Michael Heinrich loves AI coins Goat, Turbo & Aethirโฆ but not TAO
