Crypto & Forex April 10, 2026 0 Comments

Covenant AI Pulls the Plug on Bittensor: Is Centralization Killing Crypto’s Next Big Thing?

Ever wonder what happens when a supposedly decentralized AI network faces accusations of centralized control? Well, Bittensor’s native token, TAO, took a nosedive this week — dropping over 15% — right after Covenant AI slammed the door shut on the network. Covenant AI, famous for its massive Covenant-72B model powered by crowdsourced contributors, pulled out citing what they called “unilateral” decisions and control lingering in the hands of just a few. It’s ironic, isn’t it? A platform built on decentralization ideals facing a centralization crisis. As someone who’s seen countless projects rise and fall over the years, this kind of drama raises a provocative question: Can true decentralization survive when power dynamics quietly shift behind the scenes? The fallout has investors on edge — especially after TAO’s meteoric 90% surge last month, fueled by nods from heavyweights like Jensen Huang and Chamath Palihapitiya. Stay tuned as the battle between transparency and control unfolds — and what it means for the future of decentralized AI. LEARN MORE

TAO, the native token of Bittensor, dropped by double digits on Thursday after Covenant AI announced its departure from the decentralized network due to concerns over centralized control and governance.

CoinGecko data shows that TAO dropped over 15% from around $337 to $284 following Covenant AI’s announcement. The token was trading at $292 at press time, down 9% in the last 24 hours.

Covenant AI, which built the large-scale Covenant-72B model using decentralized contributors, alleged that the Bittensor network’s governance structure is not fully decentralized in practice.

The team said key decisions and operational controls remain concentrated among a small number of actors despite the network’s stated decentralization principles.

Covenant AI accused Jacob Steeves, Bittensor’s founder, of exercising unilateral control over key aspects of the network.

“These actions include the suspension of emissions to our subnets, the removal of our moderation capabilities over our own community channels, the unilateral deprecation of our subnet infrastructure, and direct economic pressure applied through large, visible token sales timed to moments of operational conflict,” the team pointed out.

Covenant AI said it could no longer continue building on Bittensor under these conditions and that it would continue its research and development efforts outside of the network.

“Decentralized, permissionless AI training is not a Bittensor feature. It is a technological capability that our team is eager to advance. Our research, our team, our models, and our vision go with us,” the team added. “We have very exciting projects and news underway and will be sharing announcements with the public very soon.”

“This will prove to birth the first subnets on Bittensor that run headless and as true commodities,” Steeves said in response to claims about centralization within Bittensor.

TAO jumped roughly 90% in March, while subnet tokens, mechanically linked to TAO through staking-backed automated market makers, posted amplified returns of up to 400%.

The rally was supported by Subnet 3’s Covenant-72B model. High-profile endorsements from Jensen Huang and Chamath Palihapitiya added credibility to Bittensor, strengthening investor confidence in the ecosystem.

Disclosure: This article was edited by Vivian Nguyen. For more information on how we create and review content, see our Editorial Policy.