Bittensor co-founder Jacob Steeves has publicly denied allegations that he possesses privileged control over the network's subnet emissions, directly challenging claims made by Covenant AI founder Sam Dare. The dispute escalated after Covenant AI announced its departure from the Bittensor ecosystem on Thursday, accusing Steeves of operating what it called "decentralization theatre" while retaining effective control over governance.
The core of the conflict centers on four specific actions Dare alleged Steeves took against Covenant AI: suspending emissions to its subnets, removing the team's moderation abilities in community channels, unilaterally deprecating subnet infrastructure, and applying economic pressure through large, visible token sales during operational disputes. In a detailed point-by-point rebuttal on X, Steeves categorically denied the most serious charge. "I do not have the ability to suspend emissions," he wrote, arguing that any market impact from his actions resulted from normal market mechanics available to any token holder.
Steeves acknowledged selling some of his "alpha holdings" in Covenant AI's three subnets but framed this as a rational market decision. He explained the subnets were not operational and running on near-100% burn code, and his sales affected emissions in the same manner as any other market participant's activity. "I don't have any privilege beyond what normal TAO holders have," Steeves asserted, defending his right to buy and sell tokens as fundamental to the system's design.
The public spat has triggered a significant market reaction. Following Covenant AI's exit announcement, the price of Bittensor's native token, TAO, plunged approximately 15% on Thursday, dropping from around $338 to a low of $285 within two hours. Although it briefly recovered to $294, the token later slumped to approximately $262, trading more than 65% below its all-time high of $757 set in April 2024.
The dispute now represents a live stress test for Bittensor's decentralized governance model. Covenant AI framed its departure as evidence of concentrated power, while Steeves contends the system functioned as intended, even amidst a politically contentious outcome. The incident raises fundamental questions about the practical implementation of decentralization when conflicts arise between major network participants.
