Neo co-founder proposes $461 million overhaul to end ‘Trust Me’ management
Neo founder Da Hongfei proposed a complete overhaul of Neo Foundation after years of working with co-founder Eric Zhang.
The plan follows Neo's first public financial disclosure from 2019, showing assets held by Neo Foundation (NF) and Neo Global Development (NGD) at around $461 million by the end of 2025.
The proposed restructuring aims to replace what Hongfei described as informal, founder-led governance, and the result could serve as a test of how legacy blockchain networks manage large treasuries and transition away from founder control.
Zhang pushed back on the core elements of the proposal, exposing more layers on top of the project and increasing scrutiny from users and investors.
Hongfei told Cointelegraph that a major part of the restructuring is a break with the founder-centric model that defined Neo's first decade.
The proposal would repatriate the foundation to the Cayman Islands, create a five-member board and an independent regulator to prevent violations of the law, and impose a 24-month ban on founding board or regulatory bodies.
Neo's struggle has become a case study in how blockchain networks with large treasuries struggle to break free from founder-central governance, especially after years of informal oversight and limited public financial disclosure.
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Returning NEO tokens to the community
According to the disclosure, NF and NGD currently control about 41 million NEO (31.3%), mainly controlled by Single Signature. Hongfi's “Giveback II” plan will return 49.5 million NEO to the community and strengthen the foundation of NGD-managed investments, which will operate under mandatory annual financial reports, onchain verifications for large transfers, and a fully publicized multi-signature wallet for Bitcoin (BTC), Ether (ETH) stable assets.
The changes are designed to replace the “trust me” management around treasury and escrow, said Ethereum creator Vitalik Buterin, whose impact-research model should be emulated as standard founders.
Zhang remains unconvinced, arguing that the idea would base Neo's legitimacy in off-chain legal structures and still place vague third-party credentials in place of directly verifiable onchain addresses.
He said his 24-month ouster from the board deprived Neon of essential technical oversight, calling the Cayman “reboot” a cosmetic change that avoids historical liability and unresolved transparency issues.
Management problems in decentralized finance
The push comes as governance struggles and perceived internal benefits dominate the debate around decentralized finance. The long-running Ave controversy between the founder-led Ave Chan Initiative and other stakeholders has raised questions about how much power entrenched service providers should wield in decentralized autonomous organizations.
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The Trump family-linked World Liberty Financial drew heavy criticism from stakeholders this week, including Tron founder Justin Xu, over a proposed new opening program for WMFI's management token and interest control over treasury assets.
Neo's bet to renew the relevance of the network
Behind the management reset lies an attempt to give Neo a credible new thesis in a market where activity is concentrated on Ethereum, a few Layer-2s, Solana and a handful of other chains.
Hongfei said today that Neo's user base is “not what it was in the 2017 to 2021 cycle” and that the numbers “reflect a project that has seen better days.”
He said users are more concentrated in long-term owners and community groups; The once buoyant Chinese market has been dampened by Beijing's restrictions, and Neo has missed out on “DeFi Summer” after delays in shipping its N3 update.
He now argues that the next decade of onchain activity will be driven less by humans than by autonomous AI agents trading on their behalf, with Neo X as an “agent-first” blockchain optimized for the shift.
The real test for both the management reset and the AI thesis will be whether Neo can complete the restructuring and attract meaningful agent-led projects over the next 12 to 24 months, and whether it will still want a board seat if those milestones are missed, he said.
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