What Triggered the Dispute Between Bittensor and Covenant AI?
Jacob Steeves, co-founder of Bittensor, rejected allegations that he used his position to pressure a major subnet developer off the network, following Covenant AI’s decision to exit the platform.
The dispute began after Covenant AI announced it would leave Bittensor, accusing Steeves of exerting control over key network functions. Founder Sam Dare alleged that Steeves suspended emissions to its subnets, restricted moderation rights, deprecated infrastructure, and applied pressure through token sales tied to operational disagreements.
Steeves responded publicly, disputing the claims and outlining his version of events. The disagreement highlights ongoing tensions around governance design and control in decentralized AI networks, where token-based systems often blur the line between market activity and operational authority.
Can Subnet Emissions Be Controlled by Individuals?
At the center of the dispute is the question of whether any individual can influence subnet emissions on Bittensor. Steeves directly rejected that claim, stating: “I do not have the ability to suspend emissions.”
He explained that his token sales affected emissions only through standard market mechanisms, adding: “I don’t have any privilege beyond what normal TAO holders have.” According to Steeves, the subnets in question were not operational and were running on near-total burn code, which influenced emission outcomes.
This distinction is critical for the network’s design. If emissions can only be altered through token activity rather than administrative control, it reinforces the system’s decentralized structure. However, disputes like this expose how economic influence can still shape outcomes, even without formal governance powers.
Investor Takeaway
What Other Allegations Were Raised and How Were They Addressed?
Covenant AI’s claims extended beyond emissions. Dare alleged that Steeves removed moderation rights and deprecated subnet infrastructure. Steeves countered that Dare had already deprecated his own community channels and that any temporary restriction on moderation was linked to the removal of “genuine, honest criticism.”
Steeves said moderation privileges were later restored and denied removing Dare’s role. On infrastructure deprecation, he stated: “Not even sure what this one means.”
On token sales, Steeves said the transactions represented less than 1% of his total investment in Covenant AI-related subnets. He added: “Visibility is impossible to avoid in my position,” defending his ability to trade tokens within the system.
Steeves did not respond to broader claims about governance structure, including allegations that effective control rests with a small group managing network upgrades.
How Did the Market React to the Fallout?
The dispute had an immediate impact on Bittensor’s native token. TAO fell 15% following Covenant AI’s announcement, dropping from $338 to $285 within two hours. The token later recovered partially to $294 before declining again to around $262.
Despite the rebound, TAO remains more than 65% below its all-time high of $757 recorded in April 2024, reflecting broader volatility in the sector as well as sensitivity to governance-related developments.
The reaction highlights how disputes over decentralization and control can translate directly into price movements, particularly in networks where governance structures are still evolving.
