Overview
- TAO fell roughly 25% to 30% after Covenant AI said it would leave the network Friday, erasing hundreds of millions in value and triggering millions of dollars in long liquidations.
- Founder Sam Dare accused co‑founder Jacob Steeves of suspending emissions to Covenant’s subnets, removing its moderation access, deprecating its infrastructure, and using token sales to apply pressure.
- Blockchain data from Taostats shows Dare sold about 37,000 TAO from his wallet, a move that added direct sell pressure during the downturn.
- Steeves denied the allegations, said he lacks the ability to halt emissions and sold less than 1% of what he invested, and he proposed lock‑based subnet ownership to give investors advance notice of founder unlocks.
- Covenant AI ran three major subnets and led the permissionless Covenant‑72B training run, and Bittensor’s design links token demand to subnet activity, which helps explain how a big operator’s exit can fast magnify price swings.