Covenant exits Bittensor: what impact on the market and indexes?

Our full analysis in this Sapho Report edition.

Let’s dive in.

The rise of subnets came to a screeching halt very recently.

Samuel Dare, founder of Covenant, announced his complete exit from Bittensor by dumping 37k TAO worth of Alpha from his 3 subnets (Templar, Grail, Basilica).

Total rug on investors.

The sale triggered a -10.1% drop on Sum of Alphas (from 1.38 to 1.24), before rebounding +8.1% (to 1.34). The subnet market absorbed the shock well.

Conversely, TAO took it harder: the news went global and caused a 17% plunge, now hovering around $260.

We use Mentat Minds indexes. Details on the calculation are on this page. Mentat 5 and Mentat 15 cover the leaders, while Mentat 70 gives a wider picture of the subnet market.

Over the last two weeks:

As often on this market, large market caps hold up better than the rest during tough times.

Affine is currently hovering between two major support and resistance levels after a strong rally that began last November.

Key to watch: its reaction to the Covenant crash: Affine climbed. A show of strength.

The subnet's movement feels symbolic: Bittensor community rallying behind Const, supporting its founder.

Affine builds interoperable AI infrastructure, coordinating multiple Bittensor subnets for scalable inference through competitive RL model training and bridging to Chutes (SN64) for public model hosting. Important to know: Const is the founder of this subnet.

The subnet currently ranks 3rd, with a market cap of $58.79 million, a volume of $1.36 million in the last 24 hours, making it the 16th most traded token.

The three largest wallets control 31.96% of the total supply, which is quite concentrated — but still below the top 5 subnets average (~38%).

The two top wallets belong to Const, and this significantly lowers the risk.

The third wallet deserves close monitoring. Over recent weeks, it bought more than 1500 TAO worth of Affine alpha in two transactions, but is selling off the subnet through regular small transactions ranging from 10 to 60 TAO.

Thank you for reading this newsletter. If you are interested in the subnet market, please feel free to click on the following link.

Disclaimer: This newsletter does not constitute investment advice. It is a tool designed to help you understand the Bittensor subnet market. Always do your own research before investing.