On April 9, 2026, Covenant AI, a prominent subnet developer on Bittensor, announced its exit from the decentralized AI network, citing centralized control and punitive actions by co-founder Jacob Steeves (known as Const), per The Block. In a detailed statement on X, Covenant AI Founder Sam Dare declared that Bittensor’s promise of true decentralization is “a lie,” accusing Steeves of maintaining effective control despite claims otherwise. Covenant had built Covenant-72B, described as the largest decentralized LLM pre-training run in history, positioning it as one of Bittensor’s most successful subnets.
Dare highlighted specific grievances, including suspension of emissions to Covenant’s subnets, removal of moderation capabilities, unilateral deprecation of infrastructure, and timed token sales as economic pressure. He described Bittensor’s “triumvirate structure” for governance as “decentralization theatre,” claiming Steeves resists meaningful power transfer and acts unilaterally.
The news triggered an immediate sell-off in Bittensor’s native token TAO, which dropped over 15% from around $337 to a low of $284 within hours, later recovering slightly to $292–$294, per CoinGecko and Crypto Briefing. The sharp decline reflected investor concerns over the network’s governance and the loss of a major contributor like Covenant AI.
Jacob Steeves responded indirectly on X without directly addressing Dare’s accusations. He suggested the event would lead to “headless subnets” operating as true commodities and announced plans for “lock-based subnet ownership,” where long-term team commitment determines ownership. This would allow investors to see token unlocks in advance, reprice subnets, and direct conviction to new teams or agents.
Mark Jeffery, partner at Bittensor Fund, downplayed the impact, stating that “Bittensor is quite a LOT more than Subnet 3, and $TAO will carry on fine without it.”
The announcement sparked mixed reactions on X. Some users criticized Covenant for an “egotistical and non-classy” exit without community communication, while others expressed shock at the governance revelations. The episode highlights ongoing debates about true decentralization in AI-focused blockchain projects like Bittensor, where technical success coexists with centralized control concerns.
Covenant AI stated it will continue its decentralized AI training efforts outside Bittensor and plans to announce new projects soon.
