Neo Co-Founder Pushes $461M Treasury Reform to Dismantle Founder Control

Neo's governance crisis has reached a turning point. Co-founder Da Hongfei is proposing a radical restructuring of the Neo Foundation that would dissolve years of informal, founder-driven control—while co-founder Erik Zhang pushes back hard on nearly every element. This isn't just Neo's fight. It's become a blueprint for how aging blockchain networks with massive treasuries manage the messy transition away from founder gatekeeping.

The $461M Treasury Revelation

Neo's first public financial disclosure since 2019 dropped a bombshell: the Neo Foundation (NF) and Neo Global Development (NGD) are sitting on approximately $461 million in assets as of end-2025. Even more revealing—about 41 million NEO tokens (31.3% of supply) remain under single-signature control. That level of centralization in a supposedly decentralized network speaks volumes about why governance reform has become urgent.

Hongfei's Governance Reboot

The proposed restructuring targets what Hongfei calls the "trust me" model that's defined Neo since launch. His plan includes:

• •Redomiciling to the Cayman Islands for clearer legal structure
• •Five-member board with independent supervisory powers
• •24-month lockout preventing either founder from board or supervisory positions
• •"Giveback II" initiative returning 49.5 million NEO tokens to the community
• •Mandatory annual financial reports and onchain attestations for major transfers
• •Multi-signature wallets for all liquid assets (Bitcoin, Ethereum, stablecoins)

Hongfei explicitly cited Vitalik Buterin's influence-through-research model as the governance standard founders should adopt. Translation: step back from direct control, build credibility through technical contributions, not authority.

Zhang's Counter-Argument

Erik Zhang isn't buying it. His main critiques cut deep: the Cayman Islands redomiciliation is cosmetic theater that doesn't address historical accountability gaps. More pointedly, he argues that excluding him from board oversight for 24 months strips Neo of essential technical guidance during a critical period. Zhang also attacked the plan's reliance on offchain legal structures and third-party attestations rather than directly verifiable onchain addresses—a valid concern for a blockchain claiming decentralization credentials.

The Broader DeFi Governance Crisis

Neo's internal clash reflects systemic tension across decentralized finance. Aave's founder-aligned governance faction versus other stakeholders, World Liberty Financial's controversial unlock schedule and treasury discretion—these disputes reveal how governance power concentrates even in supposedly decentralized systems. When insiders retain structural advantages, communities lose confidence fast.

Neo's Existential Bet

Behind the governance restructuring sits a more fundamental problem: Neo lost market relevance. User activity has consolidated onto Ethereum, Solana, and layer-2 solutions. The Chinese market that once fueled adoption collapsed under Beijing's crypto bans. Neo missed DeFi Summer entirely due to N3 upgrade delays.

Hongfei's pivot: position Neo as an "agent-first" blockchain optimized for autonomous AI agents transacting on behalf of users. He's betting the next wave of onchain activity runs on machines, not humans—and Neo can capture that emerging market.

The restructuring and AI thesis will be tested hard over the next 12-24 months. Can Neo execute the governance reset, attract agent-native projects, and rebuild developer pipeline? If not, expect Hongfei to reassess whether stepping away from board seats makes strategic sense.