Zach Anderson
Apr 17, 2026 15:00
Da Hongfei’s plan would return 49.5M NEO tokens to the community and ban both founders from the board for 24 months, but co-founder Erik Zhang is pushing back.
Neo co-founder Da Hongfei has unveiled a radical governance overhaul that would return nearly 50 million NEO tokens to the community and bar both founders from board positions for two years—a direct response to what he calls years of “trust me” governance that left one of crypto’s oldest networks effectively paralyzed.
The proposal comes alongside Neo’s first public financial disclosure since 2019, revealing approximately $461 million in assets held across the Neo Foundation and Neo Global Development at the end of 2025.
What the Restructuring Would Change
The plan would relocate the foundation to the Cayman Islands, establish a five-member board with an independent Supervisor empowered to block bylaw violations, and impose a 24-month cooling-off period preventing either Hongfei or co-founder Erik Zhang from serving on governance bodies.
Perhaps more significantly, the “Giveback II” initiative would return 49.5 million reserved NEO tokens to the community. Currently, the foundation and NGD control roughly 41 million NEO—about 31.3% of total supply—primarily under single-signature control.
Under the new framework, the foundation would operate with mandatory annual financial reports, onchain attestations for large transfers, and fully disclosed multi-signature wallets for BTC, ETH, stablecoins, and other liquid holdings.
Zhang Fires Back
Co-founder Erik Zhang isn’t buying it. He argues the proposal grounds Neo’s legitimacy in offchain legal structures while still leaving room for “opaque third-party attestations” rather than directly verifiable onchain addresses.
His bigger concern: the 24-month board exclusion strips Neo of essential technical oversight at a critical juncture. Zhang has characterized the Cayman restructuring as a “cosmetic shell change” that sidesteps historical accountability issues.
The public clash exposes deep divisions that have apparently existed for years, with the co-founders now airing their disagreements on social media and through competing public statements.
A Broader Governance Crisis
Neo’s internal battle mirrors governance struggles playing out across decentralized finance. Aave has weathered its own dispute between the founder-aligned Aave Chan Initiative and other stakeholders over how much power entrenched service providers should hold within DAOs.
Meanwhile, World Liberty Financial—the Trump family-linked project—drew sharp criticism this week from stakeholders including Tron’s Justin Sun over proposed token unlock schedules and discretionary treasury control.
Can Neo Reclaim Relevance?
Hongfei has been blunt about Neo’s current position. The user base is “not where it was in the 2017 to 2021 cycle,” he acknowledged, with activity now concentrated among long-term holders. The Chinese market that once drove growth has contracted under Beijing’s crypto bans, and Neo missed the DeFi boom while delayed on its N3 upgrade.
His pitch for revival centers on positioning Neo X as an “agent-first” blockchain optimized for autonomous AI agents—betting that the next decade of onchain activity will be driven more by machines transacting on behalf of humans than by direct user interaction.
Whether that thesis holds, and whether the governance restructuring actually happens, should become clearer over the next 12 to 24 months. Hongfei has indicated he’d reassess his own board ambitions if Neo fails to complete the restructuring and attract meaningful AI-native development within that window.
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