Covenant AI accuses Bittensor of fake decentralization under single-person control; founder Sam exits and sells majority stake, triggering ~20% TAO crash amid governance dispute with co-founder Const.
Regulation & Gov ·
Covenant AI has accused Bittensor of operating under centralized control despite claims of decentralization, alleging that a single person maintains authority over the network's governance, suspends emissions, and uses token sales coercively. The dispute escalated when Covenant AI departed the network, citing governance misalignment with their permissionless principles. Sam, the founder of Covenant AI, sold a majority of his tokens, triggering a roughly 20% decline in TAO's value.
The conflict has drawn responses from other major participants. Const, a Bittensor co-founder, characterized Covenant AI's departure as an "ugly decision out of malice and greed" and advocated for renewed community-vote-based governance to elect subnet teams. Another subnet operator, Fish, defended Const by detailing his support for foundational subnets and accused Sam of misrepresenting events after Const sold 5% of his own tokens.
Questions remain about the underlying governance structure, the mechanisms by which token sales influence network decisions, and the extent to which a single actor can exercise control. Const has signaled interest in a public debate on these governance concerns, though the terms and timing have not been settled.