TAO, Bittensor’s native token, fell by double digits on Thursday after Covenant AI announced its exit from the decentralized network due to concerns about central control and governance.
Queen Gekko Data It shows that TAO fell more than 15% from about $337 to $284 after the AI charter advertisement. The token was trading at $292 at press time, down 9% over the past 24 hours.
Covenant AI, which built a large-scale Covenant-72B model using decentralized contributors, claimed that the Bittensor network’s governance structure is not fully decentralized in practice.
The team said that key decisions and operational controls remain concentrated among a small number of actors despite the network’s stated decentralization principles.
Covenant AI accused Jacob Steeves, founder of Bittensor, of exerting unilateral control over key aspects of the network.
“These actions include suspending emissions to our subnets, removing our moderation capabilities on our private community channels, unilateral neglect of our subnet infrastructure, and direct economic pressure applied through large, visible token sales reserved for moments of operational conflict,” the team noted.
Covenant AI said it can no longer continue building on Bittensor under these circumstances and that it will continue off-grid R&D efforts.
“Decentralized and permissionless AI training is not a feature of Bittensor. It is a technological capability that our team is looking to develop. Our research, team, models and vision are walking with us,” the team added. “We have very exciting projects and news in the pipeline and will be sharing announcements with the public very soon.”
“This will prove the birth of the first subnetworks on Bittensor that operate headless as true commodities,” Steves said in response to claims about centralization within Bittensor.
TAO jumped nearly 90% in March, while subnet tokens, mechanically linked to TAO through automated market makers powered by staking, posted massive returns of up to 400%.
The rally was supported by the Covenant-72B pattern of subnet 3. High level Approvals By Jensen Huang and Chamath Palihapitiya added credibility to Bittensor, boosting investor confidence in the ecosystem.
