The struggles of Aave over the past few months have served 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. The user base is relatively limited, the capital scale is finite, and everyone is more or less on the same page—just get the product out first. Once a protocol has thoroughly "fattened up," the most likely places for landmines are long detached from the level of business growth. Let's briefly review the recent turmoil at Aave. Aave DAO holds the core smart contracts and the treasury, while Aave Labs, the company controlled by founder Stani, controls the front-end website and brand trademarks. When the protocol starts earning tens of millions of dollars annually, the contradictions can no longer be suppressed. Aave Labs wanted to take a share of the revenue, and the community immediately resisted, viewing it as draining the treasury. The two sides argued fiercely in on-chain governance and on social platforms.
This is almost an inevitable issue that established projects encounter once they grow large. Once a protocol becomes big, the troubles aren't just about the obvious matters; the real headaches are often the things that were left unclear in the past and can no longer be avoided.
Neo, as an old-guard public chain that raised the banner as early as 2014, saw its two founders publicly fall out, with constant disputes over financial opacity. The control of foundation assets and mainnet governance rights were also dragged into the spotlight. This incident might seem like a personal fallout, but it's not that simple; it's more like long-unresolved issues being detonated all at once.
Precisely because of this, even before the controversy subsided, a foundation restructuring proposal was already put forward.
The restructuring proposal was put forward by Neo founder Da Hongfei (also CEO of NGD). The proposal is written bluntly: the two founders have diverged in vision and priorities, resulting in a governance deadlock where many key decisions cannot be pushed forward. Meanwhile, on-chain governance has long been dominated by tokens controlled by the foundation, with broader token holders having almost no sense of participation. The proposal specifically points out that these are not minor issues that just popped up; they are structural failures. Delaying further will only make them worse.
Many early projects developing to this day普遍 face similar historical legacy issues. However, just as the market once expected Neo to fall into endless internal strife and consumption, this brutally honest foundation restructuring proposal was placed on the table. It is worth noting that, as the proposer, Da Hongfei himself will transfer all assets of the NGD (Neo Global Development) he manages to the new foundation. Through this act of "revolutionizing himself," we can see that Da Hongfei genuinely wants to rebuild a new governance framework for Neo.
Thoroughly Restructuring the Neo Foundation
The core objectives of the restructuring proposal are fourfold. The first is to establish a unified on-chain and off-chain governance framework, truly empowering Neo token holders to become the decision-makers. The second is to introduce a staking voting mechanism to directly kick out speculative users only looking to skim profits. The third, and most bold, is to completely sever the entire ecosystem's dependence on the founders, forcibly reclaiming all core assets and control rights for the foundation,坚决 avoiding a situation where the entire network can be overturned by a few big shots on a whim. The final point is to relentlessly pursue high efficiency and absolute transparency under the new system.
Judging from the roadmap, this is not a foundation restructuring proposal that remains at the slogan level but is systematically advanced in clear phases.
In the first 1 to 3 months, the focus will be on rebuilding the governance and legal structure, including the foundation's migration to the Cayman Islands and the establishment of the initial board of directors.
Months 2 to 5 will enter the token and protocol adjustment phase: beginning to transfer tokens into the Giveback II lock-up address while preparing for a network upgrade.
Subsequently, key restructurings such as the staking voting mechanism, NEO divisibility, token redistribution, and asset integration will be gradually implemented. The overall timeline is stretched to about a year to ensure the plan is fully implemented.
To achieve fairness and justice, and give Holders real rights, the proposal has thoroughly restructured the personnel system of the Neo Foundation.
The proposal strongly designs a two-way checks and balances system with a five-person board of directors plus an independent supervisor. It explicitly states that founders must absolutely not hold these core governance positions for the first two years. Token holders' power is also maximized. As long as the staking threshold is met, you can nominate board candidates; if you're dissatisfied with anyone, you can even initiate a vote to directly remove directors who hold positions but don't do their jobs.
Specifically, the initial board of directors will be formed by each founder nominating 4 people, and independent community leaders and core developers will select 5 directors from this pool of 8 candidates. This way, not only can the founders not interfere with the board, but the proposal also pairs the board with an independent supervisory body for the foundation, which supervises and checks the board's management and budget actions, ensuring fairness and justice in operations.
Regarding token holders' rights, those who meet the minimum staking voting threshold can nominate candidates for board positions; moreover, token holders can initiate votes to remove board directors or supervisors. From selection to removal, token holders become true coin owners (shareholders).
Changing the personnel system also requires配合 the legal framework. The proposal is quite direct about the current Singapore CLG (Company Limited by Guarantee). It believes this shell is本身 unsuitable for Neo today. It looks like there's a foundation, but when major issues arise, the member structure easily leads to deadlock. So the first step is clear: switch to a Cayman Islands Foundation Company, and one with a no-member structure. The meaning isn't hard to understand: don't let the foundation matter continue to get stuck between a few people anymore.
To prevent speculators from causing trouble, Neo also introduced a staking voting mechanism with a long lock-up period of 180 days. Previously, voting cost nothing, allowing people to be fence-sitters. Now, to sit at the governance table, one must genuinely lock up capital and bear risk. Simultaneously, NEO tokens finally gained decimal points and can be divided infinitely. This means retail investors can also participate in voting, not just the whales who qualify for the table.
The old voting method was too much like a passerby casually giving a like. What Neo wants to change now is to turn liking into staking. If you want a say at this table, you must first put your time cost and opportunity cost on the line.
Giving Back to the Community, Redistributing Foundation Tokens
Giveback II is the hardest move in this proposal. The reason is also directly pointed out in the proposal: NF and NGD together hold 41 million NEO and 40 million GAS, a significant portion of which is still under single-signature control. The proposal specifically contrasts this with the current voting weight supporting the seven consensus nodes, highlighting the gap. The message is plain: for a chain whose mainnet has been running for nearly a decade, having assets and voting rights so concentrated本身 damages credibility.
In fact, as early as 2017, Neo conducted a round of Giveback activity, where the Neo Foundation refunded all participants who purchased in the ICO but still retained their Neo tokens. This round of Giveback II will once again give back to all Neo community members. The proposal aims to redistribute most of the tokens to the community, while retaining only limited strategic reserves, allowing the foundation to slowly support itself with the GAS generated from staking. Community organizations will also receive a portion of NEO, which must continue to be staked in the early years, using the GAS to maintain operations. The largest portion (approximately 26 million NEO and 40 million GAS) will be returned to token holders through an on-chain rebasing method.
The subsequent asset integration is also straightforward. The proposal wants to first consolidate assets that can be directly transferred, like cash, stablecoins, and liquid holdings, under the foundation's name. Those investments and receivables that cannot be directly moved for now must also be brought under the effective control of the foundation. Later, even non-financial assets like domain names, trademarks, IP, and code repositories are to be brought in together. What it ultimately wants to create is a truly proper treasury, not several affiliated structures each holding their own pile.
For Neo, what is most needed now is not a new narrative, but to first restore trust.
This thing isn't usually visible, but一旦 it blows up, it's extremely致命. Right now, people in the circle are watching closely. Developers are wondering if this chain will be plagued by internal strife every day. Partners are calculating whether the foundation's money and power have been sorted out. The retail investors in the community are观望, wondering if they can only cheer from the sidelines or truly get a seat at the table to share a piece of the pie. Actually, this proposal has already made it clear. Reorganizing the foundation, breaking the deadlock, and completely dispersing the overly concentrated voting rights—these drastic moves are说白了 meant to rebuild a hardcore foundation that everyone can trust for Neo's next stage.
Let's look at this with a broader perspective; this isn't just a mess unique to Neo. Aave has been arguing daily for months about how to split revenue and who owns the brand, which boils down to重新划定 the territory between the protocol and the development team. Lido created that dual governance mechanism allowing stETH holders to also hit the brakes at any time, showing that just issuing a governance token to敷衍事 is no longer feasible. And remember the huge mess Arbitrum caused with the AIP-1 proposal, which later forced them to step by step create budget transparency and a security council mechanism—they are also老老实实 making up for this required course. Neo settling this account now by biting the bullet is absolutely ten thousand times better than settling it after a complete collapse later.
Founders Leaving the Center of Power, Can the Chain Run Better?
This question is big and very practical.
However, it can be明确 stated that leaving the center of power does not mean the founders will completely leave Neo. Instead, under an institutional management model, the founders can better serve the entire Neo community. Da Hongfei told BlockBeats, "Neo, as one of the oldest public chains in the industry, sees most projects from the same era either firmly controlled by their founders, stuck in governance deadlock, or quietly fading away. Almost no project, while still standing, has truly attempted a thorough institutional restructuring."
Today's Neo is很像 a person reaching the time to grow up. Many things could be pushed forward in the past relying on the industry's vigorous development; disagreements could be tolerated and set aside for now. But this kind of day inevitably has an end. Once people truly fall out, the protocol must learn to stand on its own. This process certainly won't be easy, and it probably won't look too pretty either. Writing the rules is just the first step. The proposal sets a monthly timeline本身就说明 this isn't as simple as changing a name or switching shells. Many things require grinding out bit by bit.
From another angle, Neo currently doesn't really have an easy path to choose. Continuing with the existing model will only let the problems grow larger. The proposal has given a clear judgment: these are not cyclical fluctuations but deeper structural issues. Precisely because of this, "institution-driven" is no longer an ideal narrative but a transformation that must be confronted head-on.
As Da Hongfei said, if the reform is successful, it will be meaningful for the entire industry. He further explained that he hopes the reorganized Neo Foundation can set an example: a mature crypto project can hand itself to a truly accountable institution for management; it can return tokens held in its name to the community; it can achieve high transparency in finance and operations; it can also allow founders to exit positional power structures while continuing to participate in ecosystem construction as contributors. If Neo succeeds in this, it will become a template that other projects can借鉴.
Bidding farewell to the era of founders is谈不上 romantic, let alone easy for Neo. If this "surgery" is successful, Neo will have the opportunity to gradually emerge from old controversies and become a chain that can continue to develop and iterate even if the founders fall out, moving towards long-term sustainability and setting an example for the entire industry.
