Covenant AI exited Bittensor on April 9, 2026, citing co-founder Jacob Steeves' retained control, "punitive" emission suspensions, and unilateral changes. The team called the network's governance "decentralization theatre." Its prominent subnet had run history's largest decentralized LLM pre-training. TAO fell 15% from $338 to $285 before recovering to $294. Risks include talent loss and trust erosion; opportunity lies in spurring truly independent "headless" subnets. Alpha: This schism acts as a hidden stress test—revealing founder dependency patterns common in crypto. It may accelerate network maturation by pruning single points of failure, raising odds that post-exit competition benchmarks real decentralization.(unfolded.)