Bittensor Governance Crisis Deepens as Team Walks Out

Bittensor, a blockchain network designed to build an open market for artificial intelligence, is facing a governance crisis after the team behind the largest decentralized AI model walked out. The departure has triggered a significant drop in Bittensor's native token price, with over $10 million in long liquidations.

The team, led by Sam Dare, founder of Covenant AI, published a public exit letter accusing co-founder Jacob Steeves of running a network that only appears to be decentralized. The accusation is that Steeves had unilaterally suspended emissions to Covenant AI's subnets, cutting off the team's income and orchestrated token sales as financial pressure during an internal dispute.

The incident raises concerns about the decentralization premise of the network and its implications for institutional investors. Bittensor's governance model, officially a 'triumvirate' of three co-equal members of the Opentensor Foundation, has been criticized for being controlled by one person. The departure of Covenant AI from the network is likely to have long-term consequences for Bittensor's market capitalization and its plans to convert its holdings into a spot ETF.