Bittensor's Governance Crisis Exposed After Key Team Member Quits

Covenant AI's Sam Dare, founder of Covenant AI, published an exit letter accusing Bittensor (TAO) co-founder Jacob Steeves of running a network that only appears to be decentralized. Dare claimed that Steeves unilaterally suspended emissions to Covenant AI's subnets, cutting off the team's income and orchestrated token sales as financial pressure during an internal dispute.

The exit letter was just 31 days after Covenant AI's defining achievement, training a 72-billion-parameter AI model distributed across more than 70 independent computers worldwide. The achievement was seen as proof that large language models could be trained outside of corporate data centers.

Dare sold 37,000 TAO tokens, worth approximately $10.2 million, on the open market. This led to a 20% price drop in TAO, with over $10 million in long liquidations triggered. The governance model of Bittensor has been criticized for being controlled by one person.

Analysts have noted that this incident highlights the risks associated with decentralized AI networks and the importance of transparency and accountability in governance.