Bittensor’s native token fell more than 18% after a main developer announced its exit, accusing the network's co-founder of calling the shots at the supposedly decentralized layer-1 blockchain and engaging in "decentralized theatre."
Bittensor Token Drops Sharply After Key Developer Exit
10 April 2026 - 10:50 CEST
Covenant AI had participated in the Bittensor ecosystem for over two years. It developed the Covenant-72B, a 72bn-parameter large language model (LLM) trained collaboratively across more than 70 independent nodes on commodity hardware, without reliance on a centralized data centre. The milestone helped drive a strong rally in TAO earlier in 2026 and drew recognition from prominent AI leaders. Nvidia CEO Jensen Huang described the achievement as "a pretty crazy technical accomplishment" in a podcast, while Anthropic co-founder Jack Clark noted its contribution in his Import AI newsletter.
Governance dispute erupts
Sam Dare, founder of Covenant AI, stated in an X post that the network had deviated from its core promise of operating without a central controlling authority. He accused co-founder Jacob Steeves of maintaining effective control, citing actions such as suspending subnet emissions, overriding owner authority over community spaces, deprecating projects unilaterally, and using token sales to compel compliance.
Dare described the situation as "centralized control with decentralized branding" and "decentralization theatre." Steeves responded briefly on social media, suggesting the departure could push the network toward more "headless" and commoditized subnets, though he offered no detailed rebuttal to the specific allegations. Community members have called for a fuller response from the core team.
Price volatility intensifies
TAO lost nearly $1bn in market capitalization amid the news. The token dropped from around $338 at around 20:00UTC on 9 Apr to as low as about $248 early around 05:00UTC on 10 Apr, with trading volumes spiking as derivatives liquidations added to the pressure. At around 08:00UTC, TAO was trading for around $260.
Bittensor is a layer-1 blockchain that incentivizes participants to contribute compute and models to a decentralized marketplace for machine intelligence. Covenant AI’s departure, including its research, models and team, removes a major contributor and tests the project’s subnet-based emission and governance model at a time when decentralized AI continues to attract institutional interest. This includes a recent Grayscale filing for a TAO trust.
