TAO’s 100% Rally Gets Rugged: Covenant AI Ditches Bittensor Over ‘Decentralization Theater’

Bittensor’s TAO token took a nosedive, shedding more than 18% in a matter of hours—wiping out its hard-earned 100% rally like a degen flipping BTC at the top. The plot twist? Covenant AI, the network’s most prolific subnet overlord, announced its exit on April 10 with all the subtlety of a flash crash.

Covenant AI, the proud operator of SN3, SN81, and SN39—because apparently subnets now need PR teams—didn’t just ghost Bittensor; they left a diss track in blog form. Founder Sam Dare went full whistleblower, accusing Bittensor’s Jacob Steeves of running “decentralization theater,” a term so painfully accurate it might as well be on a meme coin. According to Dare, Steeves pulled the plug on emissions, revoked moderation rights, deprecated entire subnets, and started dumping TAO like it was pre-2017 Bitcoin. Oh, and he’s allegedly running a “triumvirate” governance model—because nothing says decentralization like a secret three-man council.

“Jacob Steeves maintains effective control over the triumvirate, resists any meaningful transfer of authority, and deploys changes unilaterally whenever he chooses, without process and without consensus,” Dare wrote, which sounds less like open-source governance and more like a cult with better GitHub commits.

Here’s the plot twist no one saw coming: decentralized, permissionless AI training isn’t even a feature of Bittensor. Who knew? A project selling itself as decentralized AI infrastructure might want to, you know, actually be decentralized. Or at least skip the PowerPoint about it.

Covenant AI wasn’t just blowing smoke—they’d actually trained a 72 billion parameter LLM, the Covenant-72B, across distributed nodes, which is about as degen as AI gets. Even Nvidia’s Jensen Huang gave them a virtual high-five. TAO surged 90% on the back of Jensen’s nod and a shoutout from Anthropic’s Jack Clark, because in 2024, crypto rallies on vibes and VC clout.

But now Sam Dare’s pulled a classic exit scam—minus the scam, plus receipts. His wallet shows a sale of over 37,000 TAO tokens. Was it a strategic rebalance? Or just a very public “I’m out”? Either way, rug pull energy is high, and the degen crowd is taking notes.

What's Next for TAO?

TAO’s currently chilling around $263, having dipped to a 24-hour low of $262.51—just enough to make leveraged longs cry—after peaking at $341. Trading volume spiked 156% as traders scrambled to either take profits or salvage their dignity.

Analyst Cheds Trading isn’t holding back: TAO might drop below the 200-day MA and sink toward the 50-DMA at $250. With RSI sitting at 41, the pain isn’t over—this isn’t a dip, it’s a slow bleed.

Derivatives markets are split like a degen’s portfolio. Total Bittensor futures open interest dipped nearly 1% to $392.59M in an hour. TAO futures OI is cratering on OKX, Gate, Bitget, Hyperliquid, and LBank—platforms where the red candles hit hardest. Meanwhile, Binance and Bybit seem blissfully unaware, still pricing TAO like the decentralized dream is alive.

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