Bittensor’s TAO token crashed by over 20% as the project lost one of its busiest subnets. The Templar subnet team has announced it will abandon its position with Bittensor. 

Bittensor lost Templar, its busiest subnet, losing a substantial part of its liquidity. Following the news, the TAO native token lost over 20% to $264.05, down from recent local highs above $340. At the peak, the loss extended to 27%, a significant crash for one of the few remaining tokenized projects in the green.

TAO was one of the surviving narrative tokens, still preserving some of its gains from the 2024-2025 bull market. The project was also supported by investor interest, and TAO still has a relatively high mindshare of 0.8% on social media.

Will Bittensor survive the loss of a major subnet?

The TAO crash arrived after the Covenant AI project announced it would leave Bittensor, and several of Covenant’s subnets stopped receiving reward emissions. 

The Templar subnet also sold 37,000 TAO, enough to affect the market. The sale also translated into losses for anyone who invested and locked TAO into the Grail, Basilica, and Templar subnets. The 37,000 TAO tokens originated from the wallet of Sam Dare, Covenant’s co-founder.

Covenant AI came up with a statement explaining its position and claimed Bittensor was not truly decentralized. 

“When a single actor can suspend a subnet’s emissions, override an owner’s authority over their own community spaces, publicly deprecate projects without process, and use token sales as a coercive mechanism to compel compliance, that is not decentralization. It is centralized control with decentralized branding,” stated Covenant AI on X.

Covenant claimed the Bittensor team suspended emissions on its subnets, froze its community channels, and destroyed its subnet infrastructure. 

According to Covenant AI, Bittensor was also not decentralized, and the co-founder had full control of the multisig wallet controlling the project.

Bittensor stated it would survive and expand with other subnets not headed by a specific project. According to Steeves, the event will lead to subnets running as true commodities. 

This will prove to birth the first subnets on Bittensor that run headless and as true commodities.

— const (@const_reborn) April 10, 2026

The Covenant AI project was significant, but according to Bittensor, it was running subnets mostly for emission rewards. The rift between Bittensor and Covenant AI may have lasting implications and split the community. For some, Bittensor will survive without Covenant, while others still seek true decentralization. 

TAO crash leads to liquidations

In the short term, the TAO price swing caused additional liquidations in the past 24 hours. Over $9.44M in long positions were liquidated, with a total of $11.36M in liquidations for the past 24 hours. 

TAO is 53.13% unlocked and will continue with new emissions over the next few years. This is the main reason investors are staking and flocking to subnets for extra rewards. TAO is also a highly liquid token with a Binance listing, allowing for the sale of some of the rewards. 

The coming days will reveal whether TAO will keep crashing or it will be seen as a buying opportunity. As Cryptopolitan reported earlier, TAO is one of the tokens included in a Grayscele ETP, exposing the asset to external investors. 

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