Bittensor (TAO) Plunges Amid Founder Dispute and 'Decentralization Theater' Accusations
Bittensor's native token, TAO, has experienced a sharp 20% decline following the announced exit of prominent subnet developer Covenant AI. The departure has ignited a heated debate over the network's decentralization claims, with Covenant AI's founder, Sam Dare, labeling Bittensor a "decentralized theater" and alleging centralized control and punitive actions by co-founder Jacob Steeves.
Covenant AI Levels Serious Allegations
Covenant AI's founder, Sam Dare, publicly stated their exit from Bittensor, citing critical governance disputes and profound decentralization concerns. Dare accused Bittensor's co-founder, Jacob Steeves (also known as Const), of maintaining effective centralized control over the network's 'triumvirate' structure. Among the specific allegations were Steeves's purported unilateral deployment of changes without consensus, resistance to authority transfer, suspension of emissions to Covenant AI's subnets, overriding moderation on community channels, and publicly deprecating their infrastructure. Dare further claimed that Steeves applied "direct economic pressure" through strategically timed token sales targeting Covenant AI.
Bittensor Founder Counters Claims Amid Community Backing
Jacob Steeves swiftly rebutted Dare's accusations on X. He denied having the ability to suspend emissions, explaining that he merely sold his own alpha holdings from non-operational subnets, an action he claims is no different from any other TAO holder. Regarding the moderation dispute, Steeves asserted that Dare himself "specifically deprecated his own channels," including the Discord, and repeatedly deleted posts containing "genuine, honest criticism." Steeves stated he temporarily intervened to prevent Dare from deleting posts by others, not to remove Dare's moderator role. A Bittensor community member, Alex DRocks, corroborated Steeves's account, confirming real-time post deletions by Dare and his deprecation of community channels. Steeves also denied making large token sales to exert economic pressure, clarifying he sold less than 1% of his investment in Covenant AI's teams.
Market Reacts with Significant Price Drop
The controversy sent shockwaves through the market, causing TAO's price to plummet by 25% from $340 to a multi-week low of $250 before a slight recovery to the $260 mark. Notably, analyst Ardi highlighted that 24 hours prior to Covenant AI's announcement, TAO recorded its highest sell volume since December 2024. He suggested this indicated a "calculated exit and execution," with large wallets pre-emptively unloading assets before the news broke, leaving smaller retail investors to bear the brunt of the sudden downturn. This event challenges TAO's recent "accumulation continuation phase," as the chart now faces a significant hurdle absorbing 18-month high sell volume at a critical support level.
