A Comprehensive Analysis of the NEO Founder Infighting
TL;DR
On December 31, 2025, the NEO public blockchain experienced a public conflict between its founders, Erik Zhang and Da Hongfei, who clashed fiercely over financial transparency and asset control. The core of the conflict focused on the disclosure of non-NEO/GAS assets and governance disputes within the Neo Foundation, with both sides accusing the other of concealing financial information and delaying asset transfers. The event triggered short-term selling pressure, with the NEO price falling by 3.4% between December 30 and 31, and 24-hour trading volume reaching $15.1M-$18.8M, indicating a cautious and bearish market sentiment.
Core Analysis
Details of the founder conflict
Conflict Timeline
| Date/Time (UTC) | event | Details |
|---|---|---|
| 2025-09-23 | Erik Zhang announces his return. | Da had previously stepped down from the front lines after proposing a single-founder management model. |
| 2025-11-16 | Community Exposure | Reddit reports that Erik was denied access to NEO's financial reports by NGD. |
| 2025-12-09 | Telephone communication | Erik tweeted that after speaking with Da, Da promised to release a statement and financial report as soon as possible. |
| 2025-12-31 03:28 | Conflict becomes public | Erik demanded full financial disclosure from the Neo Foundation, stating that both parties had reached an agreement: Da would withdraw from the mainnet on January 1, 2026, to focus on NeoX/SpoonOS. |
| 2025-12-31 07:11 | Da's response | The company promised to release the NF/NGD report in the first half of Q1 2026, accusing Erik of unilaterally controlling the vault and consensus mechanism. |
| 2025-12-31 07:35-07:49 | Erik elaborates | The core issue is Da's opaque management of non-NEO/GAS foundation assets, which he claims is being withheld from NEO/GAS assets to avoid the risk of asset secrecy. |
Key points of contention
Erik Zhang's main charges:
- Da Hongfei lacks verifiable financial disclosures regarding Neo Foundation's non-NEO/GAS assets (such as BTC, ETH, etc.).
- Da has a conflict of interest with the competing project EON.
- Neo Global Development (NGD) refused to provide complete financial statements.
Da Hongfei's main counterattack:
- Erik controls the vast majority of assets in the NEO/GAS vault.
- Erik delayed transferring NEO/GAS tokens to a multisignature address.
- The company emphasized its commitment to community governance and pledged to release preliminary financial data and a full Q1 2026 report.
Price Impact Analysis
Short-term price performance
NEO experienced a significant short-term pullback during the period when the founder conflict became public. According to hourly OHLC data, from 17:00 UTC on December 30th to 08:00 UTC on December 31st, the price fell from approximately $3.78 to $3.646, a drop of about 3.4% .
| Time period | Price changes | Trading volume | Market capitalization |
|---|---|---|---|
| 24 hours (until 08:00 UTC on December 31) | -0.86% to -1.06% | $15.1M - $18.8M (-17.4%) | $258.7M - $259.9M |
| Short-term peaks and troughs (December 30-31) | -3.4% ($3.78 → $3.646) | Accelerated volume increase | Circulating supply ~70.53M NEO |
As of 08:00 UTC on December 31, 2025, the price of NEO remained stable in the range of $3.67-$3.72 . It is worth noting that the price fluctuations were relatively mild, with no panic selling observed, but the 17.4% decrease in trading volume reflects a strong wait-and-see attitude in the market.
Derivatives Market Reaction
The futures market shows that short-term bulls have been hit. 24-hour futures open interest fell by 9.15% , with total OI at $17.02M.
Liquidation data further confirms the pressure on the bulls:
- Total settlement amount in 24 hours: $14,144
- Long positions liquidated: $12,388 (87.6%)
- Short liquidation: $1,757 (12.4%)
This imbalance indicates that leveraged long positions were forced to close out during the price decline, creating a short-term negative feedback loop.
Technical Analysis
Multi-period indicator overview
| Timeframe | RSI(14) | MACD trend | Price vs. Moving Average | Signal |
|---|---|---|---|---|
| 1 hour | 49.91 (Neutral) | -0.0061 (Weak bearish) | Below EMA/SMA | Short-term bearish |
| 4 hours | 51.02 (Neutral) | -0.0117 (Short selling pressure weakens) | Above EMA, test support | Neutral to more |
| Daily chart | 44.49 (close to oversold) | +0.0486 (Bull divergence) | Below the long-term moving average, but stabilizing | Long-term downtrend, short-term rebound possible |
Key technology position
Support level:
- $3.65 (1-hour Bollinger Band lower rail)
- $3.64 (4-hour Bollinger Band lower rail)
- $3.48-$3.56 (High-density long liquidation zone, cumulative $265k-$150k)
Resistance level:
- $3.75 (1-hour SM50/Supertrend)
- $3.81 (1-hour Bollinger Band upper rail)
- $3.84-$3.86 (Short liquidation zone, cumulative $196k-$267k)
Volatility and Fund Flows
The ATR indicator shows increased volatility (0.043 for 1 hour, 0.085 for 4 hours, and 0.199 for daily), reflecting increased market uncertainty. The CMF(20) indicator shows a buy-on-dealing of +0.15 on the 1-hour chart, which diverges from the price decline, suggesting that some funds are building positions at lower levels.
Capital Fee Rate Analysis
- Binance: +0.0017% (Long positions paid, mildly bullish bias)
- OKX: -0.0043% (Short-term payment)
- Bybit: +0.01% (Multiple payments)
The mixed funding rates indicate that the market has not formed a one-sided consensus, and the slight bullish bias on major exchanges may indicate a mean reversion opportunity.
Social sentiment analysis
Main narrative
Social media discussions erupted on December 31, with the core narrative revolving around the founders accusing each other of financial concealment and loss of control over governance:
- Amplified Governance Risks : Da Hongfei views single-management as a systemic risk and emphasizes the necessity of transitioning to community governance.
- Concerns about financial opacity : Erik Zhang advocates for greater transparency in Neo Foundation assets to prevent non-NEO/GAS assets from becoming a "black box."
- Technical analysis suggests that the price may further decline to the $3.67-$3.64 support level, and even test the long-term lower trendline at $3.37.
KOL Opinions
| Account | position | Key points |
|---|---|---|
| Da Hongfei (@dahongfei) | Founder's Statement | Erik is accused of controlling the vault and delaying transfers, but he promises to restore confidence with the Q1 2026 financial report. |
| Erik Zhang (@neoerikzhang) | Founder's Statement | The requirement for a verifiable asset list, stating that the custody of NEO/GAS is a risk mitigation measure. |
| Foresight News | Third-party summary | Both sides accused each other of financial concealment and delayed transfers, highlighting internal tensions. |
Overall emotional tendency
The social sentiment is negative , primarily driven by:
- The public conflict between the founders exposed internal divisions and financial uncertainty.
- Technical analysis predicts further downside potential.
- Lack of extensive community discussion or supportive response
It is worth noting that Neo's official account still posted neutral event updates and holiday greetings on December 30, completely avoiding the topic of conflict, reflecting the project team's attempt to maintain a facade of calm.
On-chain data
Basic indicators
As of December 31, 2025, no abnormalities were observed in basic on-chain activities.
- Daily GAS Reward: 0.098944 GAS per NEO (approximately $0.18)
- Annualized return: 18.38%
- The protocol is functioning correctly: Neo X mainnet v0.5.1 was released in November.
Missing data and limitations
Due to the proximity of the events, the following key on-chain data is unavailable:
- Specific trading volume from December 29th to 31st
- Active address changes
- Update on the distribution of token holding addresses
- Large transfers or whale activity
Historical data shows that a large transaction of 9.25 million NEO (13.2% of the circulating supply) affected consensus node voting in 2024, but no evidence of a similar event in December 2025 has been found.
Links to the conflict chain
Although the founders' conflict focuses on asset control and delays in multisignature transfers, as of 08:00 UTC on December 31, no abnormal on-chain activity directly related to the conflict, such as sudden multisignature changes, DAO voting, or fund outflows, was detected . This indicates that the dispute remains at the level of public statements and has not yet translated into on-chain governance action.
in conclusion
The internal strife among NEO's founders became fully public in the early hours of December 31, 2025, bringing to light deep-seated conflicts surrounding financial transparency, asset control, and governance models. The conflict triggered a short-term price pullback of approximately 3.4% and pressure for long liquidation, with the derivatives OI falling by 9.15%, reflecting damaged market confidence. Technically, the outlook is neutral to bearish, with the $3.65-$3.48 support zone acting as a key defense; a break below this level could trigger a deeper pullback to $3.37. Social sentiment leans towards cautious bearishness, but there are signs of panic selling.
From a governance perspective, the commitment by both parties to provide financial reports in Q1 2026 sets a timeline for resolving the dispute, but the transparency of implementation and the rebuilding of community trust remain challenges. Investors should closely monitor the quality of subsequent financial disclosures, the progress of multi-signature transfers, and the defense of the key support level of $3.65. The market is currently in a wait-and-see mode, awaiting more substantial evidence to assess the long-term impact of the conflict on the ecosystem.