Key Highlights
- Bittensor’s TAO token declined over 18% following Covenant AI’s network departure announcement
- Sam Dare, Covenant AI’s founder, leveled accusations of centralized governance against Bittensor co-founder Jacob Steeves
- Allegations included emission suspensions, removal of moderation privileges, and subnet deprecations
- The token trades between $263–$292, beneath its 200-day moving average, with critical support at $250
- Open interest in futures contracts decreased almost 1% to $392.59 million, with significant liquidations across major exchanges
On April 10, 2026, Bittensor’s native token TAO experienced a dramatic plunge exceeding 18% within a single day, completely reversing gains from a recent 100%+ surge. The sharp downturn followed Covenant AI’s public declaration of its withdrawal from the Bittensor ecosystem.
As one of the network’s most prominent contributors, Covenant AI maintained operations across three critical subnets: Templar (SN3), Basilica (SN39), and Grail (SN81).
In a scathing public disclosure, Sam Dare, the founder behind Covenant AI, directly challenged Bittensor co-founder Jacob Steeves, claiming the network operates under a facade of decentralization while maintaining centralized authority.
“The network employs a triumvirate governance model—three individuals controlling the multisig for protocol upgrades, promoted as distributed decision-making. This is misleading. It’s merely performance art masquerading as decentralization,” Dare stated in his announcement.
Dare’s accusations detailed multiple concerning actions: the suspension of token emissions directed to Covenant’s infrastructure, revocation of community channel moderation capabilities, unilateral deprecation of their subnet systems, and calculated token liquidations designed to create financial strain.
According to Dare, Steeves “exercises absolute authority over the triumvirate framework, blocks any genuine decentralization of power, and implements network modifications unilaterally at will, circumventing established procedures and community agreement.”
Mass Token Liquidation by Covenant AI Leadership
Blockchain analytics from taosats revealed that Dare liquidated his complete subnet portfolio, disposing of more than 37,000 TAO tokens from his personal wallet. This liquidation event intensified downward price momentum.
While exiting the Bittensor ecosystem, Covenant AI confirmed retention of its research division, proprietary models, and intellectual property. The organization hinted at forthcoming project reveals. “Decentralized, permissionless artificial intelligence training transcends Bittensor—it represents a technological frontier our team remains committed to exploring,” their statement emphasized.
At publication time, TAO was fluctuating within the $263–$292 range. The 24-hour price spectrum extended from $262.51 to $341. Transaction volume surged by 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 appears destined for the 50-day moving average positioned at $250. The Relative Strength Index (RSI) declined to 41, suggesting additional bearish momentum may materialize.
Covenant AI’s Covenant-72B language model had previously catalyzed TAO’s impressive rally. When NVIDIA CEO Jensen Huang acknowledged the model during an appearance on the All-In Podcast, the recognition propelled TAO upward by more than 90%.
According to CoinGlass analytics, futures open interest for Bittensor contracted nearly 1% to $392.59 million in just one hour. The heaviest liquidation activity occurred on OKX, Gate, Bitget, Hyperliquid, and LBank exchanges. Binance and Bybit had not reflected corresponding adjustments at the time of analysis.
TAO currently hovers around $263 with futures open interest standing at $392.59 million in the aftermath of Covenant AI’s network exodus.
