Introduction

Capital inefficiency has hindered traditional decentralized lending protocols, limiting the potential of collateral and digital assets. These platforms often suffer from constraints such as narrow token support, fragmented liquidity, or centralization.

Onyx Protocol addresses these challenges by introducing a fully decentralized, multi-token liquidity protocol. Powered by the native utility token, Onyxcoin (XCN), Onyx Protocol provides unified access to aggregated capital, ensuring efficient utilization of digital assets. Onyx Protocol offers a more reliable and trustworthy platform for digital asset holders to borrow and lend by eliminating single points of failure and promoting transparency.

What is Onyx Protocol?

Source: Onyx DAO X Account

Onyx Protocol is a decentralized finance platform built on the Ethereum blockchain. It offers secure and efficient lending and borrowing solutions. Beyond traditional ERC-20 tokens, Onyx supports a wider range of assets, including ERC-721 and ERC-1155 tokens. Leveraging the power of smart contracts, Onyx provides a transparent and trustless environment for users to access financial services such as lending and borrowing.

Within the Onyx Protocol ecosystem, the utilization of credit lines is a distinguished and unique feature. Offering flexible credit lines without a monthly repayment plan or predefined expiration dates tackling decentralized lending issues creatively. Once accessed and borrowed, these credit lines are perpetual as long as the collateral remains sufficient. This is an innovative approach to DeFi.

How Does Onyx Protocol Work?

Onyx Protocol operates through decentralized smart contracts deployed on the Ethereum chain. These contracts enable the deposit of digital assets, assess the value of the collateral, and issue credit lines based on the provided collateral.

Let’s explore how Onyx Protocol works:

a) Deposit: Users deposit digital assets onto the platform and enable them as collateral.

b) Evaluation: The assets are evaluated based on their aggregate value and collateral factors, determining the maximum credit line available.

c) Credit Line: An algorithmic credit line is issued based on the collateral value without the need for traditional credit checks.

d) Borrowing: Users can borrow Ether or ERC-20 tokens, with interest rates determined by the yield curve for the specific asset.

e) Governance: Changes to the protocol are made through on-chain governance proposals initiated by Onyxcoin stakers.

Features of Onyx Protocol

The Onyx Protocol is a platform designed with a fully decentralized architecture that operates on transparent, open, and credible peer-to-peer smart contracts. Unlike traditional platforms that rely on centralized control, the Onyx Protocol leverages the decentralized nature of the blockchain to ensure that all transactions are transparent, secure, and immutable. The Onyx Protocol consists of the following features:

Onyx Protocol App

The Onyx Protocol lies at the heart of the ecosystem as a decentralized platform enabling peer-to-peer money market lending. It functions through transparent and reliable smart contracts on the Ethereum blockchain, accessible via the Onyx Web App—a user-friendly interface for accessing various services.

Source: Onyx Web App

Collateral

Users can deposit various digital assets as collateral in the Onyx Protocol. Supported assets include Ether (ETH), ERC-20 tokens, ERC-721 tokens, and ERC-1155 tokens. By doing so, they can access credit lines and borrow assets within the platform. Depositors of supported assets can also earn yield, which varies according to the specific yield curve for each asset. Furthermore, Onyxcoin (XCN) offers extra yield incentives, determined by reward speeds established through on-chain governance.

To deposit assets on the Onyx Web App, users are required to have a supported wallet. To supply your assets as collateral, follow the steps below:

1) Click on ‘Dashboard’ on the left-hand pane

Source: Onyx Web App

2) Click on the asset you wish to supply (XCN is used for this stimulation)

Source: Onyx Web App

3) After clicking on the asset you wish to supply, follow the prompt

Source: Onyx Web App

4) Then, enable the asset as a collateral

Source: Onyx Web App

Borrowing and Credit Lines

Through the Onyx Protocol, users can utilize their deposited collateral to access an aggregated and unified credit line. Users can borrow assets such as Ether (ETH) or ERC-20 tokens like USDT and USDC. The borrowing process is perpetual and does not have monthly payments or expiration dates.

To borrow assets on Onyx Protocol, follow the steps below:

1) From the ‘Dashboard’ selected at the left-hand pane, click on the preferred asset under ‘Borrow’ (XCN is used for this stimulation).

Source: Onyx Web App

2) Click on the ‘Enable’ button to borrow the selected asset

Source: Onyx Web App

XCN Bridge

XCN Bridge is a decentralized platform that allows users to easily transfer their XCN tokens between the Ethereum and BNB chains. You will need a compatible and supported wallet and a stable internet connection to use the bridge. Follow the steps below to bridge your tokens:

1) Visit the XCN bridge page, and choose the source chain and the receiving chain. Then, connect your wallet and go on to bridge.

Source: XCN Bridge

NFT Lending

Source: Onyx App

Onyx Protocol supports non-fungible tokens (NFTs) to be used as collateral. This innovative feature enhances users’ borrowing capacity, making it possible to unlock the value of NFTs within the lending ecosystem. The NFTs available on Onyx Protocol are WPUNKS, BAYC, and MAYC.

XCN Staking

To stake your XCN token, follow the steps below:

1) Click on ‘Stake’ on the lefthand pane of the Onyx Web App

Source: Onyx Web App

2) Click on the ‘Stake’ button and follow the prompt to enable the process

Source: Onyx Web App

VUSD

Source: Onyx Web App

VUSD is a virtual USD-based stablecoin fully backed by on-chain reserves and deployed on the Ethereum blockchain. Onyx Protocol, through an approved proposal from the DAO, adds VUSD markets to its decentralized money markets. This will enable users to supply and borrow VUSD on the Onyx Web App. Onyx allocated $50 million worth of VUSD as collateral to facilitate the initial issuance of VUSD.

Onyx Protocol Architecture

A few underlying concepts and technologies help Onyx drive its decentralized finance solution.

oTokens

oTokens serve as the primary mechanism for interacting with the Onyx Protocol. When users engage in actions such as minting, redeeming, borrowing, repaying, liquidating assets, or transferring oTokens, these operations are executed via the oToken contract. oToken is an EIP-20-compliant representation of balances supplied to the protocol. Each asset supported by the Onyx Protocol is integrated through an oToken contract.

By minting oTokens, users accrue interest as the oToken’s exchange rate appreciates relative to the underlying asset. Additionally, oTokens can be used as collateral to borrow assets within the Onyx Protocol.

The protocol offers two variants of oTokens: OErc20 and OEther. Both conform to the EIP-20 standard; however, OErc20 wraps an underlying ERC-20 asset, while OEther wraps Ether itself.

Comptroller

The Comptroller is the risk management layer of the Onyx protocol. It determines how much collateral a user must maintain and how much a user can be liquidated. When a user interacts with an oToken, the Comptroller is asked to approve or deny the transaction. Essentially, the Comptroller maps user balances to risk weights to make its determinations.

Governance

The Onyx Protocol is governed and upgraded by XCN token holders through four key components: the XCN token, staking, governance module (Governor Alpha), and Timelock. These contracts empower the community to propose, vote on, and implement changes through the administrative functions of oTokens or the Comptroller.

Security

Through the Onyx Protocol Bug Bounty Program, smart contract codes and balances are publicly accessible for verification. Security researchers are encouraged to participate and are eligible for rewards by identifying and reporting undiscovered vulnerabilities that could lead to asset loss, asset freezing, or user harm. Bounties are awarded based on the severity and exploitability of the vulnerabilities reported.

What is Onyxcoin (XCN)?

Source: Onyx Protocol

Onyxcoin (XCN), an ERC-20 token built on the Ethereum blockchain, serves as the native utility and governance token of the Onyx Protocol. XCN holders are automatically integrated into the Onyx Protocol Decentralized Autonomous Organization (DAO), where the token plays a crucial role in the governance and ongoing development of the protocol.

Tokenomics

Source: Huong Dan Dao Tien Ao Website

The total supply of XCN tokens was initially set at 100 billion units but has been reduced to 48,470,523,779 units following the burning of unclaimed distributions and locked allocations for the team and founders. Currently, 23 billion units are in circulation, while 10 billion units have been allocated to the Decentralized Autonomous Organization (DAO) for grants, incentives, distributions, and other operations. Additionally, 15 billion units have been assigned to the Treasury and are locked in a time-locked smart contract, which will release 200 million XCN tokens monthly over a 75-month period, starting in April 2024.

XCN Token Utility

Source: Onyx Protocol

XCN’s relevance is not limited to the Onyx Protocol but also to the Web3 community. The following are the token utility of XCN:

Payments

XCN is accessible on decentralized and centralized exchanges, enabling its use for trading, bill settlements, and accessing services within the Onyx ecosystem.

Staking

Staking is a process through which holders of XCN lock up their holding to earn a specified amount of APR. Staking XCN serves as an investment opportunity and grants holders the chance to be involved in the governance of the Onyx Protocol.

Governance

The Onyx Protocol is entirely owned and governed by XCN token holders. Their staked XCN tokens are used to vote on protocol improvements and modifications. A minimum stake of 100,000,000 XCN tokens is required to propose changes to the protocol. This governance mechanism has facilitated significant proposals, such as the addition of VUSD markets to the Onyx Protocol’s decentralized money markets.

Onyx DAO App

The Onyx DAO represents the community-driven governance body that oversees the operations and maintenance of Onyx protocol. The DAO manages the Onyx Treasury and makes important decisions through on-chain voting. Onyx utilizes on-chain governance to facilitate transparent and decentralized decision-making. Additionally, Onyxcoin holders can participate in the governance process by staking their tokens and voting on proposals that affect the protocol.

Proposals may encompass a range of changes, such as modifying the interest rate model or introducing support for a new asset. Governance actions can be proposed by any wallet address holding over 100,000,000 XCN in voting power. Once a proposal is submitted, the community has a 3-day window to cast their votes. If the proposal receives a majority approval with a minimum of 200,000,000 votes cast, it is queued in the Timelock and can be executed after a 2-day waiting period.

To access the DAO portal, users must have a reliable internet connection and a supported wallet.

Here’s a detailed guide to help you get involved with the Onyx DAO:

1) Launch Onyx Protocol’s Web App and connect your wallet

Source: Onyx Web App

2) Click on ‘Governance’ on the left-hand panel

Source: Onyx Web App

The amount of XCN staked determines the users’ voting power. Hence, proposals can be created and voted for or against through this interface. Additionally, users can review the platform’s history of proposals.

Onyx Gas Refund Program

Source: OnyxDAO X Account

Due to the relatively high gas fees on Ethereum, the Onyx Gas Refund Program has allocated $100,000 in ETH to reimburse users for the gas costs incurred when interacting with the protocol. This applies to gas fees spent on any Onyx smart contracts utilizing the protocol, covering actions such as supplying, borrowing, minting, staking, claiming, and repaying. Refunds are processed weekly, every Friday at 00:00 UTC.

Partnerships

Source: Onyx Medium

Onyx Protocol, through its DAO, has officially partnered with Wavebridge to strengthen its presence in the Asian market and foster the growth of its regional community. Wavebridge, a prominent leader in the digital asset financial sector, brings extensive experience from its involvement in high-profile partnerships within the digital asset ecosystem.

In a statement on its Medium account, Onyx Protocol expressed enthusiasm for the collaboration, highlighting Wavebridge’s deep expertise and influence in South Korea. This partnership strategically positions Onyx Protocol as a decentralized, global platform well-equipped to serve the evolving needs of its Asian community as it continues to expand and innovate.

Is XCN a Good Investment?

Holding XCN tokens represents a fractional stake in the governance of the Onyx Protocol. Given the distinct nature of the Onyx Protocol, there is potential for significant growth as more users adopt the platform. Furthermore, the innovative approach to addressing a key DeFi challenge, with strong community support and well-structured tokenomics, positions XCN as a long-term and sustainable investment opportunity. These factors may offer investors added confidence in the potential value of XCN token.

However, it is essential to recognize that cryptocurrencies are highly volatile, speculative, and operate in an unregulated environment with no consumer protection. Therefore, it is strongly recommended to seek professional financial advice, carefully manage risks, and invest only what you can afford to lose. It is also crucial to understand that investing in Onyxcoin (XCN) or any other cryptocurrency does not guarantee returns and could lead to capital loss.

How to Own XCN

You can buy XCN from centralized and decentralized cryptocurrency exchanges. For example, Gate.io offers traders the XCN/USDT trading pair. To own the token, create a Gate.io account, and complete the registration process. Also, you must fund your spot trading account and go through the steps to buy an XCN token.

Highlights

Onyx Protocol Security Breach

The Onyx Protocol encountered a security breach in November 2023, resulting in the loss of approximately 1,163.53 Ethereum (ETH), valued at $2.1 million. The breach was exploited through a flash loan attack.

Alex Onyx, the community leader, confirmed the incident via his X account and assured users that the XCN token, its smart contract, and the staking pool were unaffected. The Onyx Protocol team is actively addressing the vulnerability and preventing future occurrences.

Source: @al_onyxprotocol X Account

Useful References

For updates and developments on Onyx Protocol, visit:

• Official Website
• XCN Bridge
• Onyx Web App
• X
• Telegram
• Telegram News
• Medium
• GitHub

Take Action on XCN

Check out XCN value in real-time and start trading your favorite currency pairs:

• XCN/USDT