‘It is decentralization theatre’: Covenant AI exits Bittensor, TAO drops 15%

Covenant AI, a major subnet developer on Bittensor, announced Thursday that it is leaving the AI-focused network ecosystem.

In a statement on X, Covenant AI Founder Sam Dare said the company can no longer build on Bittensor because the network’s governance contradicts its stated commitment to decentralization.

“The entire premise of Bittensor, the promise that drew builders, miners, validators, and investors into this ecosystem, is that no single entity controls it,” Dare wrote. “That promise is a lie.”

The Covenant founder said the team has been building on a conviction that AI model training should not be controlled by a single entity, and delivered on that mission by developing Covenant-72B into the largest decentralized case of LLM pre-training run in history. Such efforts placed Covenant as one of the most prominent subnets on Bittensor.

Despite the success, Covenant has decided to leave the network, citing Bittensor Co-founder Jacob Steeves as the key reason for the departure.

Dare claimed in the statement that Steeves, also known as Const, has been asserting his authority over the subnet to regain his control over Covenant after it had grown too big to be managed.

The Block has reached out to the Bittensor co-founder for further comment.

‘Decentralization theatre’

Bittensor has operated under a “triumvirate structure” with three individuals managing the multisig for network upgrades, presenting it as distributed governance to the community.

“It is not. It is decentralization theatre,” Dare said. “Jacob Steeves maintains effective control over the triumvirate, resists any meaningful transfer of authority, and deploys changes unilaterally whenever he chooses, without process and without consensus.”

Dare said that Steeves has recently taken actions against Covenant that undermine Bittensor’s decentralization principles.

These actions include suspending emissions to Covenant’s subnets, removing the team’s moderation capabilities over its community channels, and unilaterally deprecating its subnet infrastructure. Additionally, Dare claimed that Steeves applied direct economic pressure through large, visible token sales timed to coincide with operational conflicts.

“They were punitive actions taken by one man who never relinquished control of a network he tells the world he no longer runs,” Dare added.

The Covenant founder wrote that the team’s efforts in decentralized AI training will continue outside of Bittensor and will be announcing new projects in the near term.

Criticism

The statement sparked a wave of reactions on X, with many users expressing shock at the sudden departure while also criticizing Covenant for leaving without prior communication to its community.

“This was a very egotistical and non-classy and dishonorable way of dealing with internal issues by Sam and team,” one X user wrote in a reply to the statement.

The price of Bittensor’s TAO token (Bittensor) fell sharply following Covenant’s announcement, dropping 15% to a low of $285 from $338 within just two hours. The price has since recovered to $294.

Meanwhile, Steeves has indirectly responded to Covenant’s announcement, without addressing the claims from Dare.

“This will prove to birth the first subnets on Bittensor that run headless and as true commodities,” Steeves wrote on X. 

Mark Jefferey, partner at Bittensor Fund, also commented — “Bittensor is quite a LOT more than Subnet 3, and $TAO will carry on fine without it.”

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