Bittensor Co-Founder Faces Exodus of Major Builder Over Decentralization Concerns, TAO Drops 18%

Covenant AI, a prominent subnet operator on the Bittensor decentralized AI network, announced its exit from the ecosystem citing 'decentralization theatre' and alleging that co-founder Jacob Steeves suspended their subnet emissions and controlled their community spaces. Steeves denied the allegations, stating he lacks the ability to suspend emissions and claiming Sam Dare was deleting community posts. The public dispute caused TAO token to plummet 18.5% in 24 hours to around $272.70, erasing nearly all gains from March when Covenant AI's Covenant-72B model training was highlighted by Chamath Palihapitiya to Nvidia's Jensen Huang on the All-In Podcast. Covenant AI operated three subnets including Templar (SN3) for decentralized pre-training and Basilica (SN39) for decentralized compute, all now showing as deprecated on Taostats block explorer.

Covenant AI's departure and allegations of centralized control

• ▪Covenant AI gained attention for the permissionless training of the Covenant-72B model
• ▪Covenant AI's Basilica subnet (SN39) was focused on decentralized compute
• ▪Sam Dare alleged that Jacob Steeves suspended Covenant AI's subnet emissions
• ▪Sam Dare alleged that Jacob Steeves exerted control over Covenant AI's community spaces
• ▪Covenant AI alleged malfeasance by BitTensor founder Jacob Steeves
• ▪Billionaire Social Capital founder Chamath Palihapitiya highlighted Covenant AI's Covenant-72B model training
• ▪Covenant AI's Covenant-72B model training was detailed to Nvidia founder Jensen Huang on the All-In Podcast
• ▪Covenant AI's Templar subnet (SN3) was focused on decentralized pre-training

Steeves' denial and conflicting accounts of governance

• ▪Jacob Steeves alleged that Sam Dare was deprecating community channels and deleting posts

Market impact and TAO token price decline

• ▪TAO is down about 64% from its all-time high of $757 from May 2024
• ▪TAO surged around 50% around the time of the All-In Podcast airing in March
• ▪TAO fell 18.5% in the last 24 hours amid public drama between BitTensor founder and Covenant AI
• ▪TAO recently changed hands around $272.70
• ▪TAO fell more than 18% in the last 24 hours
• ▪TAO jumped from $247 on March 19 to $370 a week later

Perspective of TAO token holders

• ▪TAO token holders saw their holdings lose 18% of value within 24 hours of the Covenant AI announcement
• ▪TAO token holders have experienced a 64% decline from the May 2024 all-time high of $757