Neo co-founder proposes $461M treasury overhaul to end ‘trust me’ governance

Neo co-founder Da Hongfei has proposed a sweeping overhaul of the Neo Foundation after years of deadlock with co-founder Erik Zhang left one of crypto’s oldest networks effectively paralyzed.

The plan follows Neo’s first public financial disclosure since 2019, showing about $461 million in assets held across the Neo Foundation (NF) and Neo Global Development (NGD) at the end of 2025.

The proposed restructuring aims to replace what Hongfei described as informal, founder-driven governance, arguing the outcome could serve as a test case for how aging blockchain networks manage large treasuries and transition away from founder control.

Zhang has pushed back on key elements of the proposal, exposing further divisions at the top of the project and increasing scrutiny from users and investors.

Hongfei told Cointelegraph that at the core of the restructuring is a break with the founder-centric model that defined Neo’s first decade.

The proposal would redomicile the foundation to the Cayman Islands, create a five-member board and an independent Supervisor with power to block bylaw breaches, and impose a 24-month ban on either founder sitting on the board or supervisory body. 

Neo’s fight has become a case study in how older blockchain networks with large treasuries struggle to move beyond founder-centric governance, especially after years of informal control and limited public financial disclosure.

Related: Aave DAO approves $25M funding grant, token allocation for Aave Labs

Returning NEO tokens to the community

According to the disclosure, NF and NGD currently control about 41 million NEO (31.3%), mainly under single-signature control. Hongfei’s “Giveback II” plan would return 49.5 million reserved NEO (NEO) to the community and consolidate NGD-managed investments back into the foundation, which would operate under mandatory annual financial reports, onchain attestations for large transfers, and fully disclosed multi-signature wallets for Bitcoin (BTC), Ether (ETH), stablecoins and other liquid assets.

He said the changes are designed to replace “trust me” governance around treasury and custody, pointing to Ethereum creator Vitalik Buterin’s influence-through-research model as a standard founders should emulate.

Zhang remains unconvinced, arguing that the proposal grounds Neo’s legitimacy in offchain legal structures and still leaves room for opaque third-party attestations instead of directly verifiable onchain addresses.

He said excluding him from the board for 24 months strips Neo of essential technical oversight, calling the Cayman “reset” a cosmetic shell change that dodges historical accountability and unresolved transparency issues.

Governance woes across decentralized finance

The push comes as governance fights and perceived insider advantages dominate debate across decentralized finance. Aave’s long-running dispute between the founder-aligned Aave Chan Initiative and other stakeholders has raised questions about how much power entrenched service providers should wield inside decentralized autonomous organizations.

Related: WLFI proposes governance staking system and USD1 usage incentives

The Trump family-linked World Liberty Financial drew scathing criticism from stakeholders this week, including Tron founder Justin Sun, over a proposed new unlock schedule for its WLFI governance token and discretionary control over treasury assets.

Neo’s bet to revive network relevance

Behind the governance reset sits an attempt to give Neo a credible new thesis in a market where activity has consolidated onto Ethereum, a few layer-2s, Solana, and a handful of other chains. 

Hongfei conceded Neo’s user base today is “not where it was in the 2017 to 2021 cycle,” and the numbers “reflect a project that has seen better days.”

He said users are more concentrated in long-term holders and community groups; the Chinese market that once fueled activity has shrunk under Beijing’s bans, and Neo missed “DeFi Summer” after delays in shipping its N3 upgrade.

He now argues that the next decade of onchain activity will be driven less by humans than by autonomous AI agents transacting on their behalf, positioning Neo X as an “agent-first” blockchain optimized for the shift. 

He said the real test for both the governance reboot and the AI thesis will be whether, over the next 12 to 24 months, Neo can complete its restructuring and attract a meaningful pipeline of agent-native projects, and whether he would still seek a board seat if those milestones are missed.

Magazine: Will the CLARITY Act be good — or bad — for DeFi?