Bittensor subnetwork creator Covenant AI said Friday it is leaving the decentralized AI network, accusing Bittensor of operating under a concentrated governance structure that undermines its claims of decentralization.
On Friday post at
“This is decentralization theater,” Dare said. “Jacob Steeves maintains effective control over the triumvirate, opposes any significant transfer of power, and makes changes unilaterally whenever he wants, without process or consensus.”
The dispute goes to the heart of Bittensor’s decentralization concept. Covenant AI has alleged that founder Jacob Steeves, known as Const, exercises undue influence over management and network operations, which Steeves denies.
Bittensor’s governance documents describe a transition system in which a “Triumvirate” of Opentensor Foundation employees share root privileges with the senate, rather than a fully open governance model.
Covenant AI claims subnet broadcasts have been suspended, Bittensor founder denies allegations
Covenant AI said Steeves had taken several actions against the project in recent weeks, including suspending broadcasts to its subnet, limiting moderation privileges on social channels and exerting “direct economic pressure” through noticeable token sales during the dispute.
Steeves has denied the allegations, saying he cannot suspend subnet broadcasts and that he has “no privileges beyond those of ordinary TAO holders.”
On Friday answerSteeves said he sold some of his “alpha shares in his three subnets because they were not working and were using almost 100% recording code,” which changed the issuance in the same way that “all buyers and sellers on Bittensor” do.
Steeves also denied stripping AI Covenant of moderation rights, saying he only temporarily removed the team’s ability to delete posts before restoring them. He added that vast token sales would be noticeable online.
“Not much. Less than 1% of what I invested in his teams. Visibility is unavoidable in my position. I reserve the right to buy and sell tokens, which is the basis of the entire dTao system,” he added.
Bittensor previously gained mainstream attention after Nvidia CEO Jensen Huang praised Bittensor Subnet 3’s decentralized training, calling Covenant’s milestone of pre-training the world’s largest decentralized LLM “a remarkable technical achievement.” while All-In podcast March 19.
Related: TAO Bittensor Price Could Drop by 40% in Five Weeks: Fractal Data
TAO sales volume surges ahead of Covenant AI’s departure announcement
The governance dispute also weighed on the Bittensor token (TAO), which has fallen about 18% in the last 24 hours as of Friday morning, according to market data.
However, sales volume on TAO rose to its highest level since December 2024, approximately 24 hours before Covenant AI’s departure was announced. “If you think it’s an accident, it means you don’t understand the game you’re playing. It was a calculated exit and execution.” he wrote cryptocurrency analyst Ardi in Friday’s post X.
Cointelegraph reached out to Covenant AI and Bittensor for comment but did not receive a response via publication.
According to David and Daniil Liberman, co-creators of the Gonka decentralized blockchain protocol, the dispute raises broader concerns for projects seeking decentralization.
“Decentralized networks that want serious builders must answer one question: Can the infrastructure you build on be used against you? If the answer is yes, decentralization is cosmetic,” they told Cointelegraph.
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