Key Highlights
- Bittensor’s TAO token plummeted over 18% following Covenant AI’s departure announcement from the network
- Sam Dare, Covenant AI’s founder, leveled serious accusations against Bittensor co-founder Jacob Steeves regarding centralized governance
- Allegations include emission suspensions, removal of moderation privileges, and subnet deprecation actions
- TAO currently hovers between $263–$292, trading beneath its 200-day moving average with $250 as critical support
- Open interest in TAO futures declined approximately 1% to $392.59 million amid widespread liquidations
The Bittensor network experienced significant turbulence as its native TAO token witnessed a sharp decline exceeding 18% within a 24-hour period on April 10, 2026. This dramatic price movement completely reversed recent gains that had seen the token surge more than 100%. The catalyst behind this sudden downturn was Covenant AI’s public declaration to withdraw from the Bittensor ecosystem.
As one of Bittensor’s most significant contributors, Covenant AI maintained operations across three distinct subnets: Templar (SN3), Basilica (SN39), and Grail (SN81). This extensive involvement positioned the company as a cornerstone participant within the protocol’s infrastructure.
In a detailed public disclosure, Sam Dare, who founded Covenant AI, launched pointed criticism at Jacob Steeves, Bittensor’s co-founder, claiming the network operates under centralized authority despite marketing itself as decentralized.
BIG drama unfolding right now on $TAO
Covenant AI, owner of SN3, SN81 & SN39 has announced they're leaving Bittensor@DistStateAndMe accusations against @const_reborn, Bittensor's founder:
-Suspended emissions to Covenant's subnets
-Stripped their moderation rights over their… pic.twitter.com/uAdzNBMOjM— Jesus Martinez (@JesusMartinez) April 10, 2026
“The Bittensor network employs a triumvirate governance model consisting of three people controlling the multisig for protocol upgrades, marketed to users as distributed decision-making. This is fundamentally misleading. What exists is merely performative decentralization,” Dare stated in his announcement.
The accusations from Dare included claims that Steeves halted token emissions directed to Covenant’s subnet operations, removed their administrative access to community communication platforms, independently shut down their subnet systems, and executed token liquidations at calculated intervals to create financial strain.
According to Dare, Steeves “holds de facto authority over the triumvirate structure, opposes any substantive delegation of power, and implements protocol modifications at will, circumventing established procedures and bypassing collective agreement.”
Mass TAO Token Liquidation by Covenant AI Leadership
On-chain tracking via taosats revealed that Dare liquidated his complete subnet position, disposing of over 37,000 TAO tokens from his personal wallet. This substantial sell-off introduced immediate downward price pressure on the asset.
While severing ties with Bittensor, Covenant AI confirmed it would retain its research division, proprietary models, and ongoing development initiatives. The organization indicated forthcoming announcements regarding new ventures. “Permissionless, decentralized AI model 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 changing hands in the $263–$292 price corridor. The token experienced a 24-hour trading range spanning from $262.51 to $341. Market activity intensified significantly, with trading volume surging 156% during the equivalent timeframe.
Critical Support and Resistance Zones
Market analyst Cheds Trading observed that TAO has breached its 200-day moving average and appears to be trending toward the 50-day moving average positioned at $250. The token’s Relative Strength Index (RSI) registered at 41, suggesting additional bearish momentum may be developing.
$TAO some sell pressure here as price throws back to SMA 200 and prior range peak pic.twitter.com/C7sJ4HOzc1
— Cheds Trading (@BigCheds) April 10, 2026
Covenant AI’s Covenant-72B artificial intelligence model had served as a significant catalyst for TAO’s preceding price appreciation. When NVIDIA’s CEO Jensen Huang mentioned the model during an appearance on the All-In Podcast, the endorsement contributed to TAO’s impressive 90% price surge.
According to analytics from CoinGlass, futures open interest for Bittensor contracted by nearly 1% to $392.59 million in just one hour. The most substantial liquidation activity occurred across OKX, Gate, Bitget, Hyperliquid, and LBank exchanges. At the time of reporting, Binance and Bybit had not yet reflected comparable corrections in their trading data.
TAO presently trades around $263 with derivatives open interest standing at $392.59 million in the aftermath of Covenant AI’s network withdrawal.
