SKN | Neo Co-Founder Pushes $461M Governance Overhaul to End “Trust Me” Era

Key Points:

• Neo proposes $461M treasury and governance overhaul.
• Plan aims to reduce founder control and increase transparency.
• Internal conflict highlights broader DeFi governance challenges.

Governance Crisis Triggers Major Proposal

A major restructuring proposal has emerged within Neo as co-founder Da Hongfei seeks to overhaul governance following years of internal deadlock with fellow co-founder Erik Zhang.

The proposal follows the project’s first financial disclosure since 2019, revealing approximately $461 million in combined assets held by the Neo Foundation and Neo Global Development entities. The scale of these holdings has intensified calls for more formal oversight and accountability.

Ending Founder-Centric Control

At the heart of the proposal is a shift away from informal, founder-driven governance. Hongfei’s plan includes relocating the foundation to the Cayman Islands, establishing a five-member board, and appointing an independent supervisor with veto power over governance breaches.

Notably, both founders would be temporarily barred from board participation for 24 months, a move designed to create separation between founding influence and operational control. The goal is to replace what has been described as a “trust me” system with structured governance mechanisms.

Returning Tokens to the Community

A central component of the overhaul is the redistribution of tokens. The proposal would return nearly 49.5 million NEO tokens to the community, while consolidating treasury assets under stricter controls.

Future treasury management would include mandatory annual financial reporting, onchain attestations for major transfers, and transparent multi-signature wallets covering assets such as Bitcoin and Ether. These changes aim to improve visibility and reduce reliance on internal assurances.

Disagreements Expose Deep Divisions

Zhang has strongly opposed aspects of the proposal, arguing that it shifts governance toward offchain legal structures rather than fully embracing onchain transparency. He also criticized the temporary exclusion of founders, warning it could weaken technical oversight during a critical transition period.

The disagreement reflects deeper tensions over how legacy blockchain projects should evolve, particularly when early governance structures no longer align with modern expectations.

A Broader Industry Challenge

Neo’s situation mirrors wider governance debates across decentralized finance. Projects like Aave have faced internal disputes over influence and control, while other ecosystems continue to grapple with balancing decentralization and efficiency.

As blockchain networks mature, questions around treasury control, decision-making authority, and accountability are becoming increasingly central to long-term viability.

Attempt to Reignite Network Relevance

Beyond governance, the overhaul represents an effort to reposition Neo in a rapidly evolving market. Activity has increasingly concentrated on ecosystems like Ethereum and newer high-growth networks, leaving older platforms struggling to maintain relevance.

Hongfei has pointed to a future driven by AI-powered agents interacting onchain, positioning Neo’s next phase as focused on “agent-first” infrastructure. The success of this vision will depend on whether the platform can attract new development and user activity over the next 12 to 24 months.

A Test Case for Blockchain Evolution

The outcome of Neo’s restructuring could serve as a blueprint for other aging blockchain networks facing similar governance challenges. Whether the plan succeeds or fails will likely shape how the industry approaches the transition from founder-led systems to fully accountable, transparent frameworks.