Subnet developer Covenant AI announced its exit from Bittensor due to decentralization concerns and alleged punitive actions by the AI-focused network ecosystem co-founder, Jacob Steeves.<\/p>\n
On Friday, Covenant AI\u2019s founder, Sam Dare, released<\/a> a statement announcing the subnet developer\u2019s departure from decentralized artificial intelligence network Bittensor, citing governance disputes and decentralization concerns.<\/p>\n \u201cWe cannot in good conscience continue to build on a network where the foundational claim we make to our investors, that this infrastructure is decentralized and permissionless, is contradicted by the reality of how the network is actually governed,\u201d Dare wrote, calling Bittensor a \u201cdecentralized theater.\u201d<\/p>\n For context, Covenant AI was one of Bittensor\u2019s most prominent contributors, operating three subnets: Templar (SN3), Basilica (SN39), and Grail (SN81). As reported<\/a> by NewsBTC, the team\u2019s Covenant-72B model, which was acknowledged by NVIDIA\u2019s CEO and cited by Anthropic\u2019s co-founder, recently triggered a significant rally for TAO\u2019s price.<\/p>\n In the statement, Covenant AI\u2019s founder argued that Bittensor\u2019s alleged decentralization problem \u201cruns deeper than any single incident,\u201d affirming that the network actually has \u201ccentralized control with decentralized branding.\u201d<\/p>\n He claimed that Bittensor\u2019s founder, Jacob Steeves, also known as Const, maintains effective control over the triumvirate structure the network operates on, \u201cresists any meaningful transfer of authority, and deploys changes unilaterally whenever he chooses, without process and without consensus.\u201d<\/p>\n In addition, Dare alleged that Steeves took a series of actions<\/a> against Covenant AI\u2019s operations over the past few weeks, including suspending emissions to its subnets, overriding moderation capabilities over its community channels, publicly deprecating the subnet infrastructure, and applying \u201cdirect economic pressure\u201d through strategically timed token sales.<\/p>\n Steeves quickly responded<\/a> to the allegations, denying Dare\u2019s claims in an X post. First, the Bittensor founder addressed the suspending emissions argument, affirming that he doesn\u2019t have that ability but sold some of his alpha holdings on the three subnets, as \u201cthey were not running, and were on near 100% burn code.\u201d<\/p>\n \u201cThis changed the emission in the same way all buys and sells on Bittensor do. I don\u2019t have any privilege beyond what normal TAO holders have,\u201d he stated.<\/p>\n Regarding the deprecation and removal of moderation rights, Steeves argued that Dare \u201cspecifically deprecated his own channels,\u201d particularly the Discord channel, and repeatedly deleted posts of \u201cgenuine, honest criticism.\u201d<\/p>\n As a result, he claims to have \u201cremoved that ability temporarily and then reinstated it later,\u201d but did not remove his moderator role. \u201cI simply stopped him from deleting posts from others in his channels.\u201d<\/p>\n Alex DRocks, a Bittensor community member and participant of the Discord channels, backed<\/a> some of Steeves\u2019 counterclaims. \u201cI saw the legit post deletions in real-time and also the bittensor discord channels being deprecated by Sam (Covenant owner) too. Everything Const said above checks out,\u201d he wrote in an X thread.<\/p>\n \u201cThe deleted posts were critiques about sn39 redoing exactly what another compute subnet is doing while they had shilled about innovating and doing better than others. (\u2026) What this proves is that Sam Dare couldn\u2019t handle a simple question without deleting the messages,\u201d DRocks continued.<\/p>\n Lastly, Steeves denied making \u201clarge visible token sales\u201d to apply economic pressure, affirming that he has sold less than 1% of what he had invested in Covenant AI\u2019s teams.<\/p>\n TAO Price Crashes After \u2018Calculated Exit\u2019<\/p>\n Amid the controversy, Bittensor saw its token, TAO, crash 25% from the $340 area to a multi-week low of $250 before bouncing toward the $260 level. Analyst Ardi noted<\/a> that 24 hours before the Covenant AI\u2019s news dropped, TAO\u2019s sell volume hit its highest level since December 2024.<\/p>\n \u201cIf you think that\u2019s a coincidence, you don\u2019t understand the game you\u2019re playing. This was a calculated exit and execution,\u201d he stated, explaining that larger wallets that knew beforehand \u201cwere unloading into the breakout attempt yesterday, using that strength to nuke millions in size well before the headline hit the market.\u201d<\/p>\nBittensor Founder, Community Push Back<\/h2>\n