BitTensor’s native token TAO tumbled after a public fallout between the protocol’s founder and one of its highest-profile builders. TAO slid about 18.5% in 24 hours as Covenant AI — a well-known subnet operator on BitTensor — announced it was leaving the network, accusing founder Jacob Steeves of behavior that, in Covenant’s view, undermines the project’s decentralization claims.
What happened
- Covenant AI founder Sam Dare publicly accused Steeves of centralizing control over the supposedly permissionless network. Dare said Steeves had the power to “suspend a subnet's emissions,” override an owner’s control of community channels, publicly deprecate projects without process, and use token sales as leverage — actions he called “centralized control with decentralized branding.”
- Covenant said the disputes affected its three subnets (including Templar, SN3, focused on decentralized pre-training, and Basilica, SN39, focused on decentralized compute). Those subnets now appear as “deprecated” on BitTensor’s block explorer, TaoStats.
- Steeves denied the allegations, saying he “does not have the ability to suspend emissions” and accusing Covenant of removing community posts and deprecating channels itself.
Why it matters
- Emissions are how TAO is distributed to miners and validators within subnets based on performance. If a single actor can halt or redirect those incentives, it calls into question the network’s core decentralization claim — a serious reputational and governance issue for a protocol that markets itself as permissionless.
- Covenant gained major attention earlier this year for training Covenant-72B permissionlessly across dozens of contributors on commodity internet connections — a development highlighted by Chamath Palihapitiya and discussed with Nvidia’s Jensen Huang on the All-In Podcast. That coverage helped push TAO up roughly 50% in late March, from about $247 on March 19 to roughly $370 a week later.
Market impact
- TAO recently traded around $272.70, having given back almost all of the gains seen after Covenant-72B’s publicity. The token is down roughly 64% from its all-time high of $757 in May 2024.
Covenant’s exit and the ensuing public spat put governance and decentralization back at the center of the BitTensor story. For builders and investors, the dispute raises immediate questions about who actually controls protocol levers on networks that tout decentralized architecture — and whether those governance mechanics are transparent and robust enough to prevent single-party influence.
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