neonewstoday.com
Erik Zhang, Neo co-founder and core developer, has published the Neo Governance Restoration Proposal, a formal response to Da Hongfei’s Neo Foundation Restructuring Proposal published four days earlier. Where Da’s proposal focused on redomiciling the Neo Foundation to the Cayman Islands, redistributing tens of millions of $NEO and $GAS tokens to holders, and introducing staked voting with a six-month lock-up, Zhang’s counter-proposal centers on institutional constraints, on-chain verifiable authorization, and accountability mechanisms for historical asset management.
The proposal arrives at a critical moment in a governance dispute that has played out publicly since late December 2025, when the two co-founders clashed over control of the treasury and financial transparency. A January meeting in Hong Kong failed to produce a resolution, and the two founders have since moved to formalize their competing visions for Neo’s governance future.
What Zhang proposes
The proposal is built on seven governance principles, including on-chain verifiability, community authorization, corresponding authority and responsibility, duty of loyalty and conflict-of-interest exclusion, continuous transparency, legal incorporation, and substantive attribution.
The first principle, on-chain verifiability, calls for addresses, transaction records, contract states, and on-chain resolutions to serve as the primary factual basis for Neo’s public governance. Zhang calls for on-chain governance outcomes to carry the highest binding effect within the NF’s internal governance system, with that status explicitly written into the NF’s constitution. He wrote:
“The most urgent issue facing Neo today is the lack of a stable public governance order, unclear boundaries of authority, insufficient constraints on the control of Neo Public Assets, and the absence of a clear, verifiable, and enforceable basis of community authorization for major public matters.”
Like Da’s proposal, Zhang calls for a five-seat board of directors and an independent supervisor. But the structural design differs in important ways.
Board structure and domain-specific authority
Zhang’s board seats are defined by functional domain. The five seats cover protocol and architecture, engineering and infrastructure, treasury audit and compliance, treasury strategy and investment, and business development and strategic partnerships. Each seat carries responsibility for a specific area of Neo’s operations.
Under Zhang’s operating rules, major matters involving a specific professional domain require explicit support from the seat responsible for that domain, in addition to board approval. Zhang frames this as ensuring that professional judgment holds substantive weight in relevant matters.
Da’s proposal establishes five board seats with staggered two-year terms and decisions by majority vote, without specifying functional domains for individual seats.
The supervisor role is similar in both proposals. Zhang describes it as an independent body responsible for oversight, conflict-of-interest review, and procedural compliance. He explicitly states that the supervisor role must not be conflated with a board seat. He wrote, “The supervisor exists to make oversight, procedure, and accountability formal parts of the governance structure.”
Neo Public Assets and accountability
Zhang’s proposal includes detailed provisions on Neo public assets and historical accountability.
The proposal defines Neo public assets broadly to include all assets formed, acquired, held, controlled, managed, nominee-held, custodied, invested on behalf of, or otherwise beneficially connected to Neo’s historical development. This includes assets held directly by the Neo Foundation and Neo Global Development, but also extends to assets held by other entities. The definition states that determination should be based on substantive ownership and control, not on whose name the assets are formally registered under.
Zhang’s proposal then establishes a continuing duty to review all Neo public assets and their related historical arrangements. It also calls for accountability procedures for conduct that may involve corruption, improper disposition of assets, transfer of benefits, harm to public assets, concealment or transfer of public assets, unlawful nominee holding, evasion of governance oversight, and/or other violations.
The proposal states the NF should engage independent legal counsel or auditing firms for special investigations, and that accountability should remain with the current existing leadership. He wrote, “The review, liquidation, and accountability for historical issues shall not be suspended, extinguished, or circumvented by governance restructuring, legal-entity restructuring, or changes in responsibilities.”
Da’s proposal, by contrast, focuses on forward-looking asset consolidation and financial discipline. It calls for transferring assets to the restructured NF and establishing transparency standards, but does not include comparable provisions for reviewing historical conduct or pursuing legal accountability.
Duty of loyalty and conflict-of-interest exclusion
Zhang introduces a principle not present in Da’s proposal: a duty of loyalty with an explicit competitor exclusion. He said, “Any person who participates in, promotes, researches, or develops projects that directly compete with Neo should not serve in a key governance role within the Neo Foundation.”
Directors and the supervisor would also be subject to recusal rules covering participation in external projects, investment relationships, employment relationships, and affiliated-entity relationships.
Key structural differences between the proposals
The two proposals diverge on several structural points. Da’s proposal calls for redomiciling the Neo Foundation from Singapore to the Cayman Islands, redistributing approximately 26 million $NEO and 40 million $GAS to tokenholders, replacing liquid voting with a staked model using a 180-day unbonding period, and barring both founders from governance roles for 24 months. Zhang’s proposal does not include these measures, instead maintaining the current Singapore registration and focusing on institutional oversight, domain-specific board authority, and historical accountability mechanisms.
Where the proposals align
Both proposals share several structural elements. Both call for a five-seat board and an independent supervisor. Both propose giving on-chain governance results a constitutional-level binding force within the NF. Both require $NEO tokenholder voting as the source of governance authority. Both call for continuous financial transparency and multi-party control over NF assets. And both frame the current governance situation as requiring urgent structural reform.
Feedback encouraged
Neo’s governance dispute now has two formal proposals on the table, each reflecting a different theory of the ecosystem’s primary problem.
Neither proposal has been formally adopted, and Da has not publicly responded to Zhang’s counter-proposal. Everyone is encouraged to participate in the discussion under both proposals.
The full proposal can be found at the link below:
https://github.com/neo-project/neo/issues/4531