Neo co-founder and core developer Erik Zhang has published the Neo Governance Restoration Proposal, a formal response to Da Honfei’s Neo Foundation restructuring proposal announced four days ago. Da’s proposal focused on moving the Neo Foundation to the Cayman Islands and redistributing tens of millions of dollars in funds. $NEO and $GAS Zhang’s counterproposal aims to distribute tokens to holders and introduce staking voting with a six-month lockup, and focuses on institutional constraints, on-chain verifiable authorization, and accountability mechanisms for past asset management.
The proposal comes at a critical moment in a governance dispute that has played out publicly since late December 2025, when the two co-founders clashed over financial management and financial transparency. After failing to reach a resolution at a meeting in Hong Kong in January, the two founders have moved to formalize their competing visions for the future of Neo’s governance.
What Mr. Zhang suggests
The proposal is built on seven governance principles, including on-chain verifiability, community authorization, corresponding authority and responsibility, duty of loyalty and elimination of conflicts of interest, continuous transparency, legal incorporation, and substantive attribution.
The first principle, on-chain verifiability, requires addresses, transaction records, contract status, and on-chain resolution to serve as the primary fact base for Neo’s public governance. Zhang calls for on-chain governance outcomes to be supremely binding within the NF’s internal governance system, and for its status to be explicitly written into the NF’s bylaws. He wrote:
“The most pressing problems facing Neo today are the lack of a stable public governance order, unclear boundaries of authority, insufficient constraints on the management of Neo public assets, and the absence of a clear, verifiable, and enforceable basis for community approval of key public matters.”
Similar to Dar’s proposal, Zhang calls for a five-member board and an independent supervisor. However, the structural design differs in important ways.
Board structure and domain-specific powers
Zhang’s board seats are defined by functional area. The five seats cover Protocols and Architecture, Engineering and Infrastructure, Financial Audit and Compliance, Financial Strategy and Investments, and Business Development and Strategic Partnerships. Each seat is responsible for a specific area of Neo’s operations.
Under Zhang’s operating regulations, important matters related to a specific area of expertise require not only approval from the board of directors, but also explicit support from the chair in charge of that area. Zhang frames this as ensuring that professional judgment has substantive weight in the relevant issues.
Mr. Da’s proposal would establish five board seats with staggered two-year terms, determined by majority vote, without specifying the functional area of each seat.
The role of the supervisor is similar in both proposals. Zhang describes it as an independent body responsible for oversight, reviewing conflicts of interest, and ensuring compliance with procedures. He is clear that the role of supervisor should not be confused with a seat on the board. “Supervisors exist to make oversight, procedures, and accountability a formal part of the governance structure,” he writes.
Neo Public Assets and Accountability
Zhang’s proposal includes detailed provisions regarding neo public assets and historical accountability.
The proposal broadly defines Neo’s public assets to include all assets that are formed, acquired, held, controlled, controlled, held in name, stored, invested in, or otherwise beneficially connected to Neo’s historical development. This includes assets held directly by Neo Foundation and Neo Global Development, but also applies to assets held by other entities. This definition states that the determination should be based on beneficial ownership and control, rather than on whose name the asset is officially registered.
Zhang’s proposal would then establish an ongoing obligation to review all of Neo’s public assets and related historical arrangements. It also requires accountability procedures for actions that may involve corruption, improper disposition of assets, transfer of benefits, damage to public assets, concealment or transfer of public assets, illegal name holding, circumvention of governance oversight, and/or other violations.
The proposal states that the NF should hire an independent lawyer or audit firm for a special investigation, and that accountability should rest with the current existing leadership. He wrote that “historical review, liquidation, and accountability must not be suspended, extinguished, or circumvented by restructuring governance, restructuring corporations, or changing responsibilities.”
In contrast, Da’s proposal focuses on forward-looking asset consolidation and financial discipline. It calls for the transfer of assets to reorganized NFs and the establishment of transparency standards, but does not include comparable provisions for reviewing past actions or pursuing legal liability.
Duty of loyalty and elimination of conflicts of interest
Zhang introduces a principle that is not present in Da’s proposal: a duty of loyalty with explicit competitor exclusion. He said, “Nobody who participates in, promotes, researches, or develops projects that directly compete with Neo may hold a significant governance role within the Neo Foundation.”
Directors and supervisors are also subject to denial rules that cover participation in external projects, investment relationships, employment relationships, and relationships with affiliates.
Main structural differences between proposals
The two proposals differ in several structural respects. Dar’s proposal calls for relocating the Neo Foundation from Singapore to the Cayman Islands and redistributing some 26 million people. $NEO and 40 million $GAS For token holders, floating voting will be replaced with a staking model using a 180-day non-binding period, and both founders will be banned from governance roles for 24 months. Mr Zhang’s proposal does not include these measures, instead retaining the current Singapore registration and focusing on institutional oversight, domain-specific board powers, and historic accountability mechanisms.
Where proposals match
Both proposals share some structural elements. Both require a five-member board of directors and an independent supervisor. Both propose to give on-chain governance outcomes constitutional-level binding force within the NF. both are required $NEO Token holder voting as a source of governance authority. Both require continued financial transparency and multiparty control over NF assets. And both frame the current governance situation as requiring urgent structural reform.
encourage feedback
There are currently two formal proposals on the table in the Neo governance debate, each reflecting a different theory about key ecological issues.
Neither proposal has been formally adopted, and Mr. Da has not publicly responded to Mr. Zhang’s counterproposal. Everyone is encouraged to participate in discussions based on both proposals.
The full text of the proposal can be viewed at the link below.
https://github.com/neo-project/neo/issues/4531
