Neo co-founder Da Hongfei has proposed an overhaul of the Neo Foundation after years of stalemate in which co-founder Erik Zhang effectively crippled one of the oldest cryptocurrency networks.
The plan follows Neo’s first public financial plan disclosure as of 2019, which indicates assets held by Neo Foundation (NF) and Neo Global Development (NGD) at the end of 2025 amounting to approximately USD 461 million.
Proposed restructuring aims to replace what Hongfei described as founder-led informal governance, arguing that the result could serve as a test case of how aging blockchain networks manage gigantic treasuries and move away from founder control.
Zhang has pushed back to the key elements of the proposal, disclosing further divisions at the top of the design and increasing control by users and investors.
Hongfei told Cointelegraph that at the heart of the restructuring is a break from the founder-centric model that defined Neo’s first decade.
The proposal would involve relocating the foundation to the Cayman Islands, creating a five-person board and an independent supervisor with the power to block violations of the regulations, and imposing a 24-month ban on any founder from serving on the board or supervisory body.
Neo’s struggle has become a case study in how legacy blockchain networks with gigantic treasuries struggle to move beyond founder-centric governance, especially after years of informal control and restricted public financial disclosure.
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Return of NEO tokens to the community
According to the disclosure, NF and NGD currently control approximately 41 million NEO (31.3%), mostly under the control of a single signature. Hongfei’s “Giveback II” plan would return 49.5 million reserved NEO (NEO) to the community and consolidate NGD-managed investments back into a foundation that would operate on mandatory annual financial reports, onchain credentials for gigantic transfers, and fully disclosed multi-signature wallets for Bitcoin (BTC), Ether (ETH), stablecoins and other liquid assets.
He said the changes aim to replace “trust me” management across treasury and deposits, pointing to Ethereum creator Vitalik Buterin’s impact-through-research model as a standard founders should emulate.
Zhang remains unconvinced, arguing that the proposal bases Neo’s legitimacy on offchain legal structures and still leaves room for murky third-party credentials rather than directly verifiable onchain addresses.
He said excluding him from the board for 24 months deprives Neo of necessary technical oversight, calling the Cayman a “reset” a cosmetic shell change that sidesteps historical accountability and unresolved transparency issues.
Governance problems in decentralized finance
The push comes at a time when governments are struggling and perceived domestic benefits dominate the debate over decentralized finance. The long-running dispute between the Aave-founded Aave Chan Initiative and other stakeholders has raised questions about how much power established service providers should wield in decentralized autonomous organizations.
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Trump family-linked company World Liberty Financial faced scathing criticism this week from stakeholders, including Tron founder Justin Sun, over its proposed recent timeline for unlocking its WLFI governance token and discretionary control over treasury assets.
Neo plant aimed at restoring the importance of the network
Behind the management reset is an attempt to present Neo with a recent, credible thesis in a market where activity has focused on Ethereum, several Layer 2s, Solana and several other networks.
Hongfei admitted that Neo’s user base today is “not where it was in the 2017-2021 cycle” and that the numbers “reflect a project that has seen better days.”
He said users were focusing more on long-term holders and community groups; the Chinese market that once fueled business has shrunk under Beijing’s bans, and Neo missed out on “DeFi Summer” due to delays in the delivery of its N3 upgrade.
It now argues that the next decade of onchain activity will be driven less by humans and more by autonomous AI agents transacting on their behalf, positioning Neo X as an “agent-first” blockchain optimized for this shift.
He said the real test for both the management restart and the AI thesis will be whether, over the next 12 to 24 months, Neo can complete its restructuring and attract a significant number of agent-native projects, and whether it will still seek a board seat if those milestones are not met.
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