The BitTensor network’s native token, TAO, experienced a significant drop of 18.5% in the past day amid escalating tensions between its founder and a major player within its ecosystem. Covenant AI, a top subnet operator on BitTensor’s platform, announced its exit over allegations against Jacob Steeves, the network’s creator. These claims suggest that Steeves engaged in actions contrary to the decentralized ethos of the network.
Sam Dare, Covenant AI’s founder, criticized Steeves on X for allegedly having the power to suspend subnet emissions, override community space controls, and deprecate projects without due process, asserting these actions were more akin to centralized control masked as decentralization. In contrast, Steeves refuted these allegations, suggesting that it was Dare who disrupted communication channels.
Covenant AI recently came into prominence for its permissionless training of the Covenant-72B model, an achievement highlighted by Chamath Palihapitiya and discussed with Nvidia’s Jensen Huang on the “All-In Podcast.” Following this exposure in March, TAO saw a price surge from $247 to $370. Despite these developments, the token has since lost its momentum.
Operating three subnets focused on distinct AI tasks like decentralized pre-training and compute, Covenant AI cited governance issues as a reason for leaving BitTensor. “Our departure stems from the contradiction between our investment promises of decentralization and the network’s actual governance,” said Dare. Consequently, the firm’s subnets are now listed as “deprecated” on Taostats.
Currently trading around $272.70, TAO has shed nearly all its gains since Covenant AI’s model gained attention, marking a 64% decline from its peak of $757 in May 2024.