Bittensor Token Crashes 27% as Covenant AI Exits Network

The Bittensor protocol, a decentralized machine learning network, experienced a significant crash on April 10, 2026, after Covenant AI, one of its major subnet developers, exited the network. The team alleged centralization and 'decentralized theater' by the founder, Jacob Steeves, also known as 'Const.'

The sudden departure of Covenant AI triggered a 27% price drop in Bittensor's token, TAO, effectively erasing nearly $900 million from its total market capitalization in a 12-hour window.

Covenant AI, which developed the successful subnets Templar, Basilica, and Grail, accused the Bittensor leadership of maintaining a 'decentralized theater' while exercising absolute control. The team claimed that their emissions (rewards) were halted as a punitive measure during a private dispute and that the core team used their large token holdings to apply downward pressure on the market during negotiations.

The exit of Covenant AI created a vacuum of confidence, resulting in a sharp move in the TAO price from its weekly high near $337 to a local low of $263. This sudden change caught many leveraged traders off guard, with over $9 million in TAO long positions being liquidated.