Neo co-founder Da Hongfei has published a proposal to restructure the Neo Foundation as a founder-independent institution, redistribute tens of millions of NEO and GAS tokens to the community, and introduce staked voting with a six-month lock-up period. The proposal, posted to GitHub on April 9, frames the restructuring as a direct response to the governance deadlock between Da and co-founder Erik Zhang.

The five-measure plan would redomicile the NF from Singapore to the Cayman Islands, establish a five-member board of directors with tokenholder-nominated seats, and bar both founders from governance roles for the first two years. If implemented, it would represent the most significant structural change to Neo’s governance since the protocol launched nearly a decade ago. The community is invited to provide comment and feedback through public discussion.

The founder deadlock

The proposal arrives after four months of public tension between Da and Zhang. The two issued competing public statements over treasury control and financial transparency in late Dec. 2025, then met in Hong Kong on Jan. 26 without reaching a resolution. In a March community AMA, Da identified governance reform as his top priority for the year and suggested returning 50% of the token supply to the community.

Da’s proposal does not frame the restructuring in diplomatic terms. He writes:

The founder relationship that once held this ecosystem together now prevents it from moving forward. That reality must be faced directly, and it must be resolved structurally — not through personal negotiation, but through institutional redesign.

A new legal structure

The NF is currently registered as a Company Limited by Guarantee in Singapore, with three members: Da, Zhang, and a neutral local representative. Da describes it as a shell entity that has never held the raised capital, employed staff, or maintained its own bank accounts. Operations have been handled by Neo Global Development.

The proposal calls for redomiciling as a memberless Cayman Islands foundation company, a legal form that allows governance to be defined entirely through constitutional documents rather than through a traditional membership or shareholding structure. Da noted, “redomiciliation is not a change of address — it is a constitutional reboot.”

Board, supervisor, and tokenholder powers

Under the proposed governance framework, a five-seat board of directors would manage the NFs affairs, set strategy, and oversee delegated operators. Directors would serve two-year terms with one re-election permitted. An independent professional agency, rather than an individual, would serve as the supervisor with the power to review and challenge board actions.

Neither Da nor Zhang would be permitted to serve on the board or as a supervisor during the first 24 months. After that exclusion period, either founder could be nominated through the standard process, carrying no special status.

The initial board would be formed through a structured process: each founder nominates four independent candidates, producing a pool of eight. Community leaders and core developers then vote to select the final five. The process excludes anyone holding a position within either founder’s initiatives.

Tokenholder powers would be embedded directly in the NF’s bylaws, creating what the proposal describes as a three-layer governance system. NEO holders who meet a minimum staked voting threshold can nominate board candidates, ratify or reject the supervisor’s appointment, initiate impeachment proceedings against any director by a supermajority vote, and trigger emergency intervention in cases of governance failure. The Grand Court of the Cayman Islands would serve as the judicial backstop.

The structure echoes elements of the Strategy and Treasury Board concept debated by the Neo Council in January, itself an outgrowth of governance discussions at Centre Point #2 in Singapore last September.

Giveback II: returning tokens to the community

The proposal’s most direct impact on NEO holders is a planned redistribution Da calls “Giveback II,” a reference to Neo’s original 2017 Sponsor Giveback Plan.

The NF and NGD collectively hold 41 million NEO and 40 million GAS, according to Neo’s FY 2025 Financial Report. The redistribution would allocate the NEO as follows:

  • Approximately 5 to 10 million NEO retained as an NF strategic reserve, staked indefinitely with GAS revenue funding operations.
  • Approximately 5 to 10 million NEO allocated to existing sponsored community groups, with mandatory staking for four years. GAS generated during that period may be claimed as operating funds.
  • Approximately 26 million NEO and 40 million GAS are redistributed to all tokenholders through a protocol-level rebasing that adjusts on-chain balances in proportion to holdings at a specified block height.

The tokenholder rebasing would require custodial support from exchanges to correctly reflect adjusted balances in user accounts. During the transition, all NF-controlled tokens designated for redistribution would be transferred to a publicly disclosed 4-of-5 multisignature address.

Staked voting and NEO divisibility

The proposal also seeks to replace Neo’s current liquid voting system, in which tokenholders can vote and unvote freely, with a time-locked staked voting mechanism requiring a 180-day unbonding period. GAS generation would shift exclusively to staked voters rather than being distributed to all holders.

Da argues that the current system produces low engagement, opportunistic voting, proxy voting by exchanges, and network insecurity. He also believes that a staking model should be redesigned to make participation economically meaningful. Da said:

The design should filter for committed, long-term-aligned voters by raising the cost of participation — discouraging opportunistic voting, reducing passive proxy voting by exchanges and custodians, and redirecting GAS generation to those who actively stake and govern.

A related change would make NEO divisible for the first time. NEO has been indivisible since launch, one of the few major tokens that cannot be transacted in fractional units. Da cites three reasons for the change: exchange compatibility for fractional withdrawals, precise arithmetic for the Giveback II rebasing, and finer-grained voting precision.

The staked voting mechanism and the Giveback II rebasing would be deployed as a single coordinated network upgrade. A separate proposal with full technical specifications has not yet been submitted.

A related governance update already in progress, which prompted NeoBurger to announce its shutdown in February, decouples GAS rewards from voting behavior. Da’s staked voting proposal goes further by introducing a mandatory lock-up period and redirecting all GAS generation to stakers.

Financial discipline and asset consolidation

The final measure calls for consolidating all ecosystem assets, both financial and non-financial, under the restructured NF. This includes cash, stablecoins, liquid holdings, domain names, social media accounts, trademarks, and code repositories. Entities seeking financial support would apply through a standardized funding process.

Da proposes that the NF sustain itself entirely through GAS revenue, asset-management income, and investment returns, without liquidating NEO tokens. He said, “this closes a longstanding source of sell pressure, and forces the Foundation to operate within a disciplined budget rather than drawing down its token holdings.”

Lastly, transparency standards would include annual financial reports, on-chain verification for large movements, and open budgeting for all funding proposals.

What comes next

The proposal lays out a 12-month implementation roadmap. The first three months would cover redomiciliation and initial board formation. Months two through five would focus on securing assets in the multisig Lock Address and developing staking specifications. The network upgrade, including staked voting, NEO divisibility, and rebasing, would be targeted for months six through nine. The final phase would complete asset consolidation and establish the financial reporting framework.

Zhang responded to the NF Restructuring Proposal opposing three points in particular. First, he doesn’t believe a new legal entity in the Cayman Islands needs to be established, which could carry negative perceptions. Second, Zhang wishes to be on the board citing his status as a founder and core technical leader. Lastly, the time-locked staking discussion should be moved to PR #4467 to facilitate discourse about protocol-level and token economic issues.

The proposal is framed as a call for community review and action, not a finished plan.

The full proposal can be found at the link below:
https://github.com/neo-project/neo/issues/4526

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