Everyone figured Bittensor was the real deal in decentralized AI. TAO token pumping hard after that All-In Podcast shoutout from Chamath—Jensen Huang nodding along, commodity hardware training massive models without billionaire GPU farms. Hype machine in overdrive, token hitting $757 highs back in May.
Then—bam. 18% plunge in 24 hours. Covenant AI, the subnet kings behind that buzzworthy Covenant-72B model, just ghosted the network. Founder Sam Dare calls out Jacob Steeves for straight-up centralization masquerading as freedom.
Bittensor’s Big Decentralization Lie Exposed?
Look, I’ve seen this movie before. Twenty years chasing Valley unicorns, and every ‘decentralized’ crypto darling starts with whitepapers full of permissionless dreams. Then the founder—always the founder—clutches the keys. Bittensor? Same script. Covenant ran three killer subnets: Templar for pre-training, Basilica for compute. Solid players drawing eyes, emissions flowing to miners and validators.
But Dare drops this bomb on X:
“When a single actor can suspend a subnet’s emissions, override an owner’s authority over their own community spaces, publicly deprecate projects without process, and use token sales as a coercive mechanism to compel compliance, that is not decentralization.”
“It is centralized control with decentralized branding.”
Oof. Steeves allegedly yanked their emissions—TAO rewards for subnet work—messed with community channels, deprecated their stuff without a vote. Covenant’s subnets now show ‘deprecated’ on Taostats. Poof.
Steeves fires back: “I do not have the ability to suspend emissions.” Claims Dare was the one nuking posts. Finger-pointing on X, market doesn’t care—sells off anyway. TAO at $272 now, wiping out post-podcast gains, 64% off ATH.
Here’s my unique take, one you won’t read in the press releases: This reeks of the Terra Luna implosion in 2022. Do Kwon preached algorithmic stability, but when shit hit, he controlled the purse strings—printing UST like candy till it all vaporized. Bittensor’s not there yet, but Steeves’ veto power? That’s the seed of a similar founder-fueled fiasco. Who profits? Not the miners grinding on commodity rigs. It’s the core team holding the real levers.
Short para. Brutal.
Covenant wasn’t some rando. Permissionless training of a 72B model across 70+ contributors—no data centers, just internet peasants pooling GPUs. Chamath hyped it to Jensen on All-In; TAO jumped 50% in a week. That was March. Now? Erased.
Dare’s parting shot: “We cannot in good conscience continue to build on a network where the foundational claim we make to our investors… is contradicted by the reality.”
Investors. Ah, yes. Who’s actually making money here? Early insiders with fat TAO bags? Sure. But subnet operators like Covenant? They’re bolting because the ‘permissionless’ pitch was PR spin. Network governance? More like founder fiat.
Will Bittensor’s TAO Price Keep Crashing?
Market’s verdict: yes, for now. Down 18.5% on the drama alone. Broader crypto wobbles—BTC dipping, AI tokens shaky—but this spat lit the fuse. If more builders follow Covenant out, emissions dry up, subnets idle, TAO’s utility craters.
Prediction: Watch for forks. Someone spins up a truly decentralized AI net, poaches the talent. Bittensor becomes cautionary tale, like EOS after its ICO billions vanished into Dan Larimer’s visions.
And the community? Fractured. Steeves loyalists vs. Dare’s crew. X threads exploding, memes flying. Classic crypto civil war.
But wait—Steeves might fix it. Denies the powers, promises transparency. Could be kayfabe, could be genuine. I’ve covered enough pivots to doubt it.
Why Does This Drama Crush Decentralized AI Hype?
Bittensor sold the dream: AI models trained on a blockchain marketplace, no OpenAI overlords, tokens incentivizing the stack. Subnets as specialized markets—text, compute, whatever. Sounded hot. TAO holders dreamed of moonshots.
Reality check. One guy suspends your rewards? Overrides your Discord? That’s Web2 with tokens slapped on. Investors poured in expecting Ethereum-level dispersion. Got Telegram admin vibes instead.
Longer view: This tests the whole decentralized AI thesis. Fetch.ai, SingularityNET—same buzzwords. But without real power diffusion, it’s vaporware. Who wins? Centralized giants like xAI, burning billions on clusters while crypto plays pretend.
Covenant’s exit? First domino. Expect copycats. TAO needs root-and-branch reform—immutable governance, no founder killswitch—or it’s toast.
Single line. Painful.
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Frequently Asked Questions
What caused Bittensor TAO token to plunge?
Covenant AI quit after accusing founder Jacob Steeves of centralizing control, like suspending subnet rewards and overriding community spaces. Token dropped 18% amid the public feud.
Is Bittensor truly decentralized?
Doubts now: Critics say founder has too much power, contradicting the permissionless pitch. Steeves denies it, but builders are bailing.
What is Covenant AI and why did they leave Bittensor?
Top subnet operator behind hyped models like Covenant-72B. Left over governance issues, calling the network ‘centralized control with decentralized branding.’
