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Covenant AI, developer of the Bittensor subnet, said on Friday that it is leaving the decentralized AI network, accusing Bittensor of operating under a concentrated governance structure that undermines its claims to decentralization.
On a Friday mail On
“It’s the theater of decentralization,” Derr said. “Jacob Steeves maintains effective control over the triumvirate, resists any meaningful transfer of power, and unilaterally deploys changes at will, without process and without consensus.”
The dispute gets to the heart of Bittensor’s idea of decentralization. Covenant AI alleged that founder Jacob Steeves, known as Const, exerted significant influence over management and network operations, an accusation Steeves denied.
Bittensor’s governance documents describe a transitional system where a “triumvirate” of Opentensor Foundation employees has root permissions alongside a Senate, rather than a fully open governance model.
Covenant AI claims that subnet emissions have been suspended, and the Bittensor founder denies the allegations
Covenant AI said Steves has taken several actions against the project in recent weeks, including suspending emissions to its subnet, restricting moderation powers in community channels and exerting “direct economic pressure” through visual token sales during the dispute.
Steeves rejected the allegations, claiming he could not suspend the subnetwork’s emissions and that he did not enjoy “any privilege beyond that enjoyed by ordinary TAO holders”.
On Friday answerSteves said he sold some of his “alpha holdings on his three subnets because they weren’t running and were on almost 100% burn code,” changing emissions in the same way “that all buying and selling on Bittensor does.”
Steves also denied stripping the Covenant AI team of its moderation rights, saying he removed the team’s ability to only temporarily delete posts before restoring them. He added that large token sales were visible on-chain.
“Not big. Less than 1% of what I invested in his teams. It’s impossible to avoid being seen in my position. I reserve the right to buy and sell tokens which supports the entire dTao system,” he added.
Bittensor previously received mainstream attention after Nvidia CEO Jensen Huang praised the decentralized training process on Bittensor Subnet 3, calling Covenant’s achievement in pre-training the largest decentralized LLM a “remarkable technical achievement.” during All in Podcast on March 19th.
Related to: Bittensor’s TAO Price May Drop 40% Within Five Weeks: Fractal Data
TAO’s sales volume skyrocketed before Covenant AI’s departure was announced
The governance dispute also affected Bittensor (Tao), which was down nearly 18% over the past 24 hours as of Friday morning, according to market data.
However, selling volume on TAO rose to its highest level since December 2024, about 24 hours before Covenant AI announced its departure. “If you think this is a coincidence, you don’t understand the game you’re playing. This was a calculated exit and execution.” books Cryptocurrency analyst Ardi in Friday post
Cointelegraph reached out to Covenant AI and Bittensor for comment, but did not receive a response as of publication.
The dispute raises broader concerns about projects seeking decentralization, according to David and Daniel Lieberman, co-founders of the layer-one decentralized protocol Gonka.
“Decentralized networks that serious builders want must answer one question: Can the infrastructure you build on be used against you? If yes, then decentralization is cosmetic,” they told Cointelegraph.
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