Covenant AI quits Bittensor, citing centralization

Covenant AI, a major developer of Bittensor subnets, announced Thursday it will exit the AI-focused blockchain. Founder Sam Dare argued the network’s governance conflicts with its decentralization claims and pointed to co-founder Jacob Steeves as the reason for the split.

In posts on X, Dare wrote that Bittensor’s upgrade process relies on a three-person multisig “triumvirate” presented as distributed governance. He called it “decentralization theatre” and asserted Steeves, also known as Const, exerts effective control, resists any transfer of authority, and makes unilateral changes without process or consensus.

Dare alleged recent actions targeted Covenant: suspending token emissions to its subnets, removing its channel moderation rights, and deprecating its subnet infrastructure. He further claimed Steeves applied economic pressure through large, visible token sales timed with operational disputes, characterizing them as punitive.

Covenant plans to continue decentralized AI training outside Bittensor and expects to announce new projects. The team previously led Covenant-72B, described as the largest decentralized large language model pre-training run to date.

Following the announcement, Bittensor’s TAO token fell from about $338 to $285 within roughly two hours, then recovered to $294. Trading remained volatile into the evening.

Steeves addressed the split on X without engaging the specific allegations. “This will prove to birth the first subnets on Bittensor that run headless and as true commodities,” he wrote. In a later post, he outlined “lock-based subnet ownership,” a framework tying ownership to a team’s long-term commitment. He added the model would let investors see in advance when an owner’s tokens unlock, reprice a subnet before the owner, and redirect support to another team or agent.

Reaction on X was mixed. Some users criticized Covenant’s communication. “This was a very egotistical and non-classy and dishonorable way of dealing with internal issues by Sam and team,” one reply read.

Mark Jefferey, a partner at Bittensor Fund, wrote that the network extends beyond a single subnet: “Bittensor is quite a LOT more than Subnet 3, and $TAO will carry on fine without it.”

Bittensor is an AI-focused blockchain that coordinates multiple specialized subnets for tasks such as model training and inference, using token incentives for builders, miners, and validators. Protocol upgrades are handled by a small multisig, a setup that has drawn scrutiny during disputes.