Farewell to the founder era, Neo ushers in a true reorganization

Title: Bidding Farewell to the Founder Era, Neo Embraces True Reorganization

Author: Rhythm BlockBeats

Source:

Repost: Mars Finance

The struggles of Aave over the past few months serve as a wake-up call for the entire crypto space.

In the early stages of a protocol, many issues can often be temporarily set aside. User base and funds are relatively limited, and everyone’s thinking is similar: just get the product out first. Once a protocol becomes “fat,” the most vulnerable points are no longer related to business growth. Let’s briefly review the recent turmoil with Aave. The Aave DAO controls the core smart contracts and treasury, while Aave Labs, the company controlled by founder Stani, manages the front-end website and branding trademarks. When the protocol earns hundreds of millions of dollars annually, conflicts become unavoidable. Aave Labs wants to take a share of the revenue, but the community immediately objects, seeing it as draining the treasury. The two sides are embroiled in disputes over on-chain governance and social platforms.

This is almost inevitable for established projects as they grow. Once a protocol expands, trouble isn’t just about the surface issues; the real problems are often those that weren’t clearly addressed before and can’t be avoided now.

Neo, as an established blockchain project that took the stage in 2014, is facing internal conflicts—public disputes between the founders, ongoing controversies over financial black boxes, and the control of foundation assets and mainnet governance being dragged into the spotlight. It appears as if the people are fighting, but it’s not that simple. It’s more like long-standing unresolved issues being suddenly ignited.

Because of this, even before the controversy subsides, a proposal for restructuring the Neo Foundation has already been put forward.

The restructuring proposal was initiated by Neo founder Dahon Fei (also NGD CEO). The proposal is straightforward: the two founders have diverging visions and priorities, leading to a governance deadlock where key decisions can’t be made. Meanwhile, on-chain governance has long been dominated by tokens controlled by the foundation, with broader token holders feeling almost no participation. The proposal emphasizes that these aren’t minor issues that just appeared; they are structural failures. Delaying further will only make things worse.

Many early projects face similar legacy issues as they develop. However, just as the market was expecting Neo to fall into endless internal strife, this sharply pointed proposal for foundation restructuring was brought to the table. Notably, as the proposer, Dahon Fei’s management of NGD (Neo Global Development) assets will be fully transferred to the new foundation. Through this act of “self-revolution,” it’s clear that Dahon Fei genuinely intends to rebuild a new governance framework for Neo.

Thoroughly Restructuring the Neo Foundation

The core goals of the restructuring proposal are fourfold. First, to establish a unified on-chain and off-chain governance framework, empowering Neo token holders to truly take control and become decision-makers; second, to introduce staking-based voting to directly exclude speculative users who only want to harvest rewards; third, to completely cut dependence on the founders by consolidating core assets and control rights into the foundation, preventing a few big players from causing the entire network to crash with a single decision; and finally, to ensure high efficiency and absolute transparency under the new system.

From the roadmap, this isn’t just a slogan-level foundation restructuring; it’s a systematic, phased approach.

In the first 1 to 3 months, the focus will be on rebuilding governance and legal structures, including relocating the foundation to the Cayman Islands and establishing an initial board of directors.

From months 2 to 5, the project will enter the token and protocol adjustment phase: moving tokens into the Giveback II locked address and preparing for network upgrades.

Subsequently, key restructuring steps such as staking voting mechanisms, token divisibility, token redistribution, and asset consolidation will be gradually implemented. The overall timeline is extended to about a year to ensure comprehensive execution.

To ensure fairness and give holders real rights, the proposal also involves a thorough overhaul of Neo Foundation personnel policies.

It proposes a dual system of a five-member board of directors plus an independent supervisor. It explicitly states that the founders are prohibited from holding core governance positions for the first two years. Token holders’ rights are also maximized: as long as they meet the staking threshold, they can nominate board candidates; they can even initiate votes to remove directors or supervisors who are inactive or unproductive.

Specifically, the initial board will be nominated by two founders, each proposing four candidates. The community leaders and core developers will select five members from this pool of eight to form the board. This way, founders cannot interfere with the board’s decisions. Outside the board, an independent supervisory body will oversee the foundation’s management and budget, ensuring fairness and transparency in internal operations.

Regarding token holder rights, those who meet the minimum staking threshold can nominate candidates for the board; they can also initiate votes to remove directors or supervisors. From nomination to removal, token holders become true “coin owners.”

Along with personnel reforms, the legal framework must also be aligned. The proposal directly addresses the current Singapore-based CLG structure, deeming it unsuitable for today’s Neo. It suggests replacing it with a Cayman-based foundation company without a membership structure. The meaning is clear: no more letting the foundation be stuck among a few individuals.

To prevent speculators from disrupting governance, Neo introduces a 180-day staking voting mechanism. Previously, voting cost nothing, and people could flip-flop between sides. Now, participating in governance requires locking in real assets and bearing risks. Additionally, NEO tokens will finally be divisible into fractional units, allowing retail investors to participate in voting, not just large holders.

The old voting system was too much like passersby giving a thumbs-up. Neo now aims to replace “likes” with “bets”: if you want to have a say at the table, you must first commit your time and opportunity costs.

Community Rewards: Foundation Token Redistribution

Giveback II is the boldest move in this proposal. The reason is explicitly stated: NF and NGD together hold 41 million NEO and 40 million GAS, with a significant portion still under single-signature control. The proposal compares this with the voting power supporting the current seven consensus nodes, highlighting the disparity. The message is straightforward: a mainnet that has been running for nearly ten years still has highly concentrated assets and voting rights, which damages credibility.

Back in 2017, Neo conducted a Giveback event, returning funds to all IC0 participants while retaining their Neo tokens. This round of Giveback II aims to reward all Neo community members again. The proposal intends to redistribute most tokens back to the community, leaving only limited strategic reserves, allowing the foundation to sustain itself through GAS staking income. Community organizations will also receive some NEO, which will be staked to support ongoing operations. The largest portion—about 26 million NEO and 40 million GAS—will be returned to holders via on-chain rebasing.

Asset integration is straightforward. The proposal plans to transfer cash, stablecoins, and liquid holdings directly to the foundation. Investments and receivables that can’t be moved immediately will be placed under the foundation’s control. Later, domain names, trademarks, IP, and code repositories will also be incorporated. The ultimate goal is to create a truly secure vault, rather than a collection of related entities holding separate shares.

For Neo, the most urgent need isn’t a new story but restoring trust.

This isn’t obvious on the surface, but once a major incident occurs, it’s deadly. The community is watching closely now. Developers are worried: will the chain keep fighting internally? Partners are calculating: do the foundation’s funds and authority have clear boundaries? Retail investors are observing: are they just spectators, or can they really get a slice of the pie? The proposal has already made this clear: restructuring the foundation, breaking deadlocks, and dispersing overly concentrated voting power are all measures to rebuild a reliable, hardcore backbone for Neo’s next phase.

From a broader perspective, this isn’t just Neo’s problem. Over the past few months, Aave has been embroiled in disputes over revenue sharing and branding control, essentially redrawing the turf between protocols and development teams. Lido’s dual governance mechanism, allowing stETH holders to intervene at any time, shows that relying solely on governance tokens is no longer enough. Similarly, Arbitrum’s AIP-1 proposal caused major upheaval, forcing them to implement transparent budgets and security committees—an essential lesson learned. Neo’s current reckoning is a much-needed, painful correction, far better than collapsing later without a plan.

Can founders step back from power and improve the chain’s performance?

This is a big, practical question.

But it’s clear that stepping back from power doesn’t mean founders will leave Neo entirely. Instead, under a system of institutional management, founders can better serve the community. Dahon Fei told Rhythm BlockBeats, “Neo is one of the oldest public chains in the industry. Many projects from the same era are now either tightly controlled by founders, stuck in governance deadlocks, or quietly fading away. Almost none have attempted a thorough institutional overhaul while still standing strong.”

Today’s Neo is like a person reaching maturity. In the past, many issues could be pushed forward thanks to industry growth, patience, and the ability to set aside disagreements. But those days are ending. When conflicts truly erupt, the protocol must learn to stand on its own. This process won’t be easy or pretty. Writing rules is just the first step. The proposal’s phased timeline, moving forward month by month, shows this isn’t a simple name change or shell swap. Many issues will need to be addressed gradually.

From another angle, Neo currently has no easy path forward. Continuing with the current model will only worsen problems over time. The proposal clearly states these aren’t just cyclical fluctuations but deeper structural issues. That’s why “system-driven” governance is no longer an ideal narrative but a necessary transformation.

As Dahon Fei said, if the reform succeeds, it will have industry-wide significance. He further explained that he hopes the restructured Neo Foundation can set an example: a mature crypto project managed by a truly accountable organization; returning tokens held in its name to the community; achieving high transparency in finances and operations; and enabling founders to step back from positional power while still contributing as ecosystem builders. If Neo pulls this off, it will become a template for others to follow.

Bidding farewell to the founder era isn’t romantic for Neo, nor is it easy. If this “surgery” is successful, Neo will have the chance to gradually move beyond old disputes, becoming a chain capable of continuous development and iteration even if the founders fall out. It will stride toward long-term stability and serve as a model for the entire industry.