TAO, the native token of Bittensor, fell nearly 25% within six hours, sliding from $337 to $253. The move erased more than $650 million in market capitalization and triggered $9.1 million in long liquidations.
The drop came as Covenant AI leveled fresh allegations against Bittensor co-founder Jacob Steeves. Covenant AI said on April 8 that it was leaving the network, arguing that Steeves still exercises centralized control over a project built around the idea of decentralized AI. TAO later recovered part of the loss, but the report said its market capitalization still fell to $2.57 billion. Over seven days, the token was down 12.8%, while its 30-day gain remained at 37%.
Covenant AI details why it left Bittensor
Two days after announcing its departure, Covenant AI founder Sam Dare published a statement laying out the complaints behind the exit. He alleged that Steeves unilaterally suspended emissions for a subnet, overrode owners inside their own community spaces, and publicly deprecated projects without following the established process. The dispute centered on governance, not branding.
Dare also accused Steeves of using large, highly visible token sales as punitive tools during operational disputes in order to force compliance. In his words, those actions were not governance decisions reached through transparent consensus, but moves made by one person who never gave up control.
Governance allegations quickly hit the market
According to Dare, Steeves still holds effective control over the triumvirate structure and resists any meaningful transfer of authority. He claimed that changes are pushed through without a formal process or broad agreement. Dare also said other participants function as “legal shields,” taking on accountability and legal exposure while Steeves remains insulated.
The controversy arrived only weeks after Bittensor drew public praise for decentralized AI, including comments from Nvidia CEO Jensen Huang. The shift in sentiment was abrupt. On April 10, TAO trading volume climbed to $1.72 billion, well above the roughly $500 million average seen earlier in the month, showing how quickly the governance dispute spilled into the market.