The recent announcement of Covenant AI's exit from the Bittensor decentralized network sent the cryptocurrency TAO into a steep decline, dropping over 15% before stabilizing. Following this news, CoinGecko reported that TAO's value slipped from approximately $337 to $284, with further fluctuations leading to a 9% depreciation in just 24 hours, closing at $292.
Covenant AI has raised significant concerns regarding the operational governance of the Bittensor network. They argue that, despite the network's claims of decentralization, key governance aspects are in the hands of a select few individuals. The organization has highlighted its challenges with Bittensor's founder, Jacob Steeves, whom they accuse of exercising excessive control over critical network decisions.
With grievances including the suspension of emissions to their subnets and restricted moderation capabilities, Covenant AI asserts that they can no longer efficiently develop within the Bittensor framework and will shift their research activities to other platforms. Their commitment to advancing decentralized and permissionless AI training remains unwavering, and they plan to share forthcoming updates about their projects.
In a counter to the allegations, Jacob Steeves asserted that Bittensor is on the cusp of launching subnets that will function independently, reinforcing the network's commitment to decentralization.
Earlier in this year, TAO experienced a remarkable surge, rising nearly 90% in March, largely driven by the interest surrounding Subnet 3's Covenant-72B model. Investor confidence was further bolstered by endorsements from prominent industry figures, highlighting the ecosystem’s potential.