Key Takeaways
- Bittensor’s TAO token plummeted over 18% following Covenant AI’s announcement of network departure
- Sam Dare, Covenant AI’s founder, leveled accusations against Bittensor co-founder Jacob Steeves regarding centralized governance
- Allegations include emission suspensions, removal of moderation privileges, and subnet deprecation
- TAO currently hovers between $263–$292, trading beneath its 200-day moving average with $250 representing critical support
- Futures open interest declined approximately 1% to $392.59 million, with significant sell pressure across OKX, Gate, and Bitget exchanges
The Bittensor network experienced significant turbulence as its native TAO token plummeted more than 18% within a 24-hour period on April 10, 2026. This sharp decline completely reversed a previous surge exceeding 100%, following Covenant AI’s public declaration of its withdrawal from the ecosystem.
As one of the network’s most prominent participants, Covenant AI managed three critical subnets: Templar (SN3), Basilica (SN39), and Grail (SN81), establishing itself as a major infrastructure provider within the protocol.
In a strongly worded public announcement, Sam Dare, who founded Covenant AI, directed serious allegations toward Jacob Steeves, Bittensor’s co-founder, characterizing the network’s operations as centrally controlled despite its decentralized branding.
“The network employs a triumvirate framework—three people controlling the multisig for protocol upgrades, marketed to participants as distributed governance. This is misleading. It’s merely decentralization performance art,” Dare stated.
Dare’s accusations included claims that Steeves halted emissions directed to Covenant’s subnet operations, revoked their moderation authority across community platforms, independently deprecated critical subnet infrastructure, and leveraged calculated token liquidations as a form of financial coercion.
According to Dare, Steeves “retains practical authority over the triumvirate, opposes any substantive power transition, and implements protocol modifications unilaterally at will, bypassing established procedures and community agreement.”
Mass Token Liquidation by Covenant AI Leadership
Following the announcement, Dare liquidated his complete subnet portfolio, disposing of more than 37,000 TAO tokens from his personal wallet, as confirmed by blockchain tracking data from taosats. This substantial sell-off intensified downward price momentum.
While exiting Bittensor, Covenant AI confirmed plans to retain its research personnel, proprietary models, and intellectual property. The organization indicated forthcoming project reveals. “Permissionless, decentralized AI model training isn’t exclusive to Bittensor. It represents a technological frontier our organization remains committed to exploring,” their statement declared.
At press time, TAO was changing hands in the $263–$292 range. The token’s 24-hour trading spectrum spanned from $262.51 to $341. Transaction volume surged 156% during the corresponding timeframe.
Critical Price Levels Under Surveillance
Prominent market analyst Cheds Trading observed that TAO has breached its 200-day moving average and appears to be gravitating toward the 50-day moving average positioned at $250. The Relative Strength Index (RSI) declined to 41, suggesting possible continued bearish momentum.
Covenant AI’s Covenant-72B artificial intelligence model had previously served as a catalyst for TAO’s impressive price appreciation. When NVIDIA CEO Jensen Huang mentioned the model during an appearance on the All-In Podcast, it contributed to TAO’s surge exceeding 90%.
According to metrics from CoinGlass, Bittensor futures open interest contracted nearly 1% to $392.59 million within a single hour. The most substantial selling activity occurred on OKX, Gate, Bitget, Hyperliquid, and LBank platforms. Major exchanges Binance and Bybit had not yet reflected comparable corrections at the time of analysis.
TAO currently trades approximately at $263 with futures open interest standing at $392.59 million in the aftermath of Covenant AI’s network exit.
