Bittensor just took a heavy blow to its decentralization narrative.
Covenant AI — the team behind Covenant-72B, one of the largest decentralized AI models on the network — has officially announced its complete exit from Bittensor. The move triggered an immediate 20%+ crash in TAO, sending the token from around $337–$340 down to the $262–$277 range in a matter of hours.
What Happened?
In a strongly worded statement, Covenant AI accused Bittensor founder Jacob Steeves (Const) of maintaining excessive centralized control. Key allegations include:
• Unilateral suspension of subnet emissions
• Interference with community channels and management rights
• Economic pressure through large token sales during conflicts
• Operating a “Triumvirate” governance structure that gives him outsized influence
Covenant AI called it “decentralization theatre” — claiming the network promises openness but operates under concentrated power.
Market Impact
• TAO price: Dropped over 20% intraday (some reports cite up to 27%)
• Multiple high-emission subnets operated by Covenant AI (SN3 Templar, SN39 Basilica, SN81) have now been deprecated
• Over $300 million wiped from the broader TAO subnet ecosystem
• More than $9–11 million in long liquidations triggered
This is one of the biggest single-day losses for TAO in recent months and raises serious questions about Bittensor’s long-term governance and attractiveness to major builders.
PulZ Take:
Covenant AI wasn’t just any subnet — it was one of the most active and technically advanced contributors. Their exit is more than a single team leaving; it’s a public vote of no confidence in Bittensor’s decentralization claims. While the project still has strong AI narrative momentum, this event highlights a growing tension between “decentralized” branding and actual power distribution. How Bittensor’s team responds in the coming days will be critical for restoring confidence.
Do you see this as a short-term shakeout or a red flag for Bittensor’s future? Are you buying the dip or staying away? Drop your thoughts below 👇
— PulZ | Daily market insights & real-time analysis
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