Key Highlights
- Bittensor’s TAO token plummeted over 18% following Covenant AI’s announced departure from the network
- Sam Dare, Covenant AI’s founder, leveled serious accusations against Bittensor co-founder Jacob Steeves regarding centralized governance
- Allegations included halted emissions, removed moderation privileges, and deprecated subnet infrastructure
- The token is currently hovering between $263–$292, trading beneath its 200-day moving average with $250 representing critical support
- Derivatives market shows futures open interest declining nearly 1% to $392.59 million, with significant liquidations across major exchanges
The TAO cryptocurrency experienced a devastating collapse of more than 18% within a 24-hour period on April 10, 2026, completely reversing an impressive rally that had previously exceeded 100%. This sharp decline was directly triggered by Covenant AI’s public declaration of its withdrawal from the Bittensor ecosystem.
As one of the platform’s most significant contributors, Covenant AI managed three critical subnets: Templar (SN3), Basilica (SN39), and Grail (SN81), establishing itself as a cornerstone participant in the protocol’s infrastructure.
In a detailed public disclosure, Sam Dare, who founded Covenant AI, directly challenged Bittensor co-founder Jacob Steeves, claiming the network functions as a centralized system disguised under decentralization rhetoric.
“The Bittensor network employs a triumvirate framework—three people controlling the multisig for protocol upgrades, marketed to users as distributed governance. The reality is different. This is merely decentralization theater,” Dare stated in his announcement.
According to Dare’s claims, Steeves halted token emissions directed toward Covenant’s subnet operations, revoked their moderation authority within community forums, independently shut down their subnet systems, and leveraged calculated token liquidations to create financial strain.
Dare asserted that Steeves “holds practical dominance over the triumvirate, opposes any substantive delegation of power, and implements modifications unilaterally at will, bypassing established procedures and collective agreement.”
Mass Token Liquidation by Covenant AI Leadership
Dare proceeded to liquidate his complete subnet portfolio, disposing of upwards of 37,000 TAO tokens from his personal wallet, verified through on-chain tracking via taosats. This substantial sell-off created immediate downward pressure on token valuation.
While exiting the Bittensor ecosystem, Covenant AI confirmed it would retain its research division, proprietary models, and ongoing development efforts. The organization indicated forthcoming announcements regarding new initiatives. “Decentralized, permissionless artificial intelligence training isn’t exclusive to Bittensor. It represents a technological frontier our team remains committed to exploring,” their official statement declared.
At press time, TAO was fluctuating in the $263–$292 range. The 24-hour price spectrum extended from $262.51 to $341. Market activity surged 156% during this timeframe.
Critical Price Levels Under Surveillance
Respected market analyst Cheds Trading observed that TAO has breached its 200-day moving average and is now approaching the 50-day moving average positioned at $250. The Relative Strength Index (RSI) has declined to 41, suggesting additional bearish momentum could materialize.
The Covenant-72B model developed by Covenant AI had served as a significant catalyst behind TAO’s earlier price surge. When NVIDIA CEO Jensen Huang mentioned this model during his appearance on the All-In Podcast, it contributed to TAO’s explosive 90% appreciation.
According to metrics from CoinGlass, Bittensor futures open interest contracted nearly 1% to $392.59 million in just one hour. The most concentrated selling activity occurred on OKX, Gate, Bitget, Hyperliquid, and LBank exchanges. At the time of analysis, Binance and Bybit had not yet reflected comparable corrections.
TAO is presently valued around $263 with derivatives open interest standing at $392.59 million in the aftermath of Covenant AI’s network departure.
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