Bittensor Governance Crisis Erupts After Co-Founder Accused of Centralized Control

Covenant AI's Sam Dare published an exit letter accusing Bittensor co-founder Jacob Steeves of running a network that appears decentralized but isn't. This accusation is part of a larger governance crisis in crypto's AI sector.

The exit happened just 31 days after Covenant AI achieved a major milestone by training a 72-billion-parameter AI model on Bittensor without any central data center or institutional backing. The achievement was seen as proof that large language models could be trained outside of corporate environments.

Covenant AI then sold its 37,000 TAO tokens worth approximately $10.2 million, causing TAO's price to fall by over 20% and triggering more than $10 million in long liquidations.

The governance crisis centers around Bittensor's 'triumvirate' model, where three co-equal members of the Opentensor Foundation propose upgrades. Critics argue that real decision-making authority has never left Steeves' hands.