Bittensor is trying to regain investor trust after one of the most high-profile internal conflicts in the history of the decentralized AI sector.
Ironically, the solution is a recovery plan developed by a person who has already left the project.
Network co-founder Jacob Steeves spoke about this in a detailed statement. It can also be seen as a response to the recent departure of Covenant AI from the Bittensor ecosystem. This was previously reported by Samuel Dare, the project founder.
The native token of Bittensor, TAO, lost about a quarter of its value in one day. This happened after Dare published a harsh public statement accusing Steeves of running a centralized system under the guise of decentralization.
What Made One of Crypto’s Most Prominent AI Developers Leave the Project
Covenant AI managed three subnets in the Bittensor network and created the Covenant-72B model, which many in the decentralized AI sector consider a real breakthrough.
Covenant-72B is a language model with 72 billion parameters, trained without permissions with the participation of more than 70 independent contributors on regular hardware.
In a statement dated April 10, Dare accused Steeves of disabling emissions for the Covenant AI subnets, stripping the team of control over their own community channels, unilaterally shutting down their infrastructure, and exerting economic pressure through large, pre-planned token sales.
He also criticized the Bittensor governance system, stating that it is far from the claimed decentralization.
“Bittensor operates on a triumvirate model, where three people control the multisig for network updates. This is presented as distributed governance, but in reality, it is not. It is just a decentralization spectacle.”
Dare added:
“Jacob Steeves effectively controls this triumvirate, blocks any attempts to transfer power, and implements changes alone, without procedures and without coordination. The other participants act more as legal cover — people who can be held accountable, while he himself stays on the sidelines.”
Dare’s statements triggered an immediate sell-off. The situation was worsened by reports that Covenant AI itself sold about 37,000 TAO tokens worth over $10 million, sparking accusations of a coordinated exit at the expense of retail investors.
How Hard Did the Conflict Hit TAO and Bittensor’s Standing With Institutions
The market reacted negatively to the situation. The price of TAO fell from about $337 to $254 in just 12 hours, losing more than 25%. Later, the token rebounded slightly and at the time of writing is trading around $261.
This incident occurred at a particularly sensitive time for Bittensor‘s institutional image. Just days before the crisis, asset manager Grayscale filed an updated S-1 form with the US Securities and Exchange Commission, continuing the process of converting its over-the-counter fund Bittensor Trust (GTAO) into a spot ETF.
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Now, against the backdrop of recent events, this institutional momentum is facing a much more skeptical reaction from the market.
GTAO itself is now trading at around $9.2, down more than 12.5% following trading on April 10.
Can a Plan From Someone Who Has Already Left Save the Network
The recovery plan proposed by Steeves is based on the Locked Stake mechanic. It adds a time factor to token ownership in the Bittensor network.
Subnet owners will be able to lock their tokens for a certain period. As a result, not only the amount of stake but also the remaining lock time will become an important metric. This creates a clearer and more transparent indicator of participant engagement.
In his statement, Steeves noted that Locked Stake was one of Dare’s last developments before his departure from Opentensor Foundation. He also admitted that he did not implement this mechanism earlier and called it his “main mistake,” hinting that it could have prevented the 25% price drop.
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As for the future operation of the network, Steeves said that mining community participants and possibly former Covenant team members have already begun coordinating to support the operation of subnets 3, 39, and 81.
He also added that a governance proposal will be brought up for community discussion at the next open call on Thursday in Discord.
