Bittensor Faces Market Shock as Key Subnet Leaves the Network

TL;DR

• Market Impact: Bittensor saw TAO fall over 20% after the Templar subnet left, removing major liquidity and shaking confidence.
• Covenant Rift: Covenant AI accused Bittensor of centralized control, citing emission suspensions and channel freezes, while a 37,000 TAO sale added pressure.
• Network Outlook: Bittensor says it will continue with commodity‑style subnets, but the community is split as liquidations topped $11.36M and emissions continue.
  

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Bittensor is facing renewed market pressure after its TAO token dropped sharply following the departure of one of its busiest subnets. The Templar team confirmed it would leave Bittensor, triggering a fast selloff and raising questions about the project’s stability. The sudden shift also highlighted deeper tensions within the ecosystem, as the network adjusts to losing a major contributor while navigating concerns about decentralization and governance.

Templar Exit Sparks a Sharp TAO Price Decline

The protocol saw its TAO token fall by more than 20% after the Templar subnet announced its exit. The token slid to around $264, down from recent highs above $340, with losses briefly reaching 27%. Templar had been one of the most active subnets on Bittensor, and its departure removed a significant source of liquidity. The event also affected sentiment around Bittensor, which had been one of the few narrative tokens still holding gains from the 2024–2025 cycle.

Covenant AI’s Claims Intensify the Rift

The Templar exit followed Covenant AI’s decision to leave Bittensor, with several of its subnets losing reward emissions. Covenant AI stated that the protocol was not decentralized, pointing to actions such as emission suspensions and control over community channels. The team argued that these moves showed centralized authority within Bittensor. The situation escalated when the Templar subnet sold 37,000 TAO, a sale linked to Covenant co‑founder Sam Dare, adding pressure to the market.

Debate Over Decentralization Shapes Community Response

Covenant AI claimed Bittensor’s team had frozen channels, halted emissions, and disrupted subnet infrastructure. The project argued that a single actor held control over the multisig wallet, challenging Bittensor’s decentralization narrative. The protocol countered that it would continue expanding with subnets not tied to specific projects. According to Steeves, the shift could push the protocol toward subnets operating as commodities, though the community remains divided on the long‑term implications.

https://t.co/06wplkr0GY

— covenant (@covenant_ai) April 9, 2026

Market Liquidations Add to Short‑Term Volatility

The TAO price swing triggered more than $9.44M in long liquidations within 24 hours, contributing to a total of $11.36M in liquidations. TAO remains 53.13% unlocked, with emissions continuing over the coming years. Investors still stake TAO across subnets for rewards, supported by the token’s liquidity and its listing on Binance. The coming days will show whether TAO continues falling or becomes a buying opportunity, as the asset is included in a Grayscale ETP.