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What is Onyx Protocol? Everything you need to know about XCN
Introduction
The low efficiency of capital hinders the development of traditional Decentralization lending protocols, limiting the potential of Collateral and digital assets. These platforms often face limitations such as narrow Token support, scattered Liquidity, or centralization.
Onyx Protocol addresses these challenges by introducing a fully Decentralization multi-Token Liquidity protocol. Onyx Protocol, driven by the native utility Token Onyxcoin (XCN), provides unified access to aggregated capital, ensuring efficient utilization of digital assets. By eliminating single points of failure and promoting transparency, Onyx Protocol offers digital asset holders a more reliable and trustworthy platform for lending and borrowing.
What is Onyx Protocol?
Onyx Protocol is a Decentralization financial platform based on the ETH blockchain, providing secure and efficient lending solutions. In addition to traditional ERC-20 Tokens, Onyx also supports a wider range of assets, including ERC-721 and ERC-1155 Tokens. With the power of Smart Contracts, Onyx provides users with a transparent and trustless environment to access Financial Services such as lending.
In the Onyx Protocol ecosystem, the use of credit limits is a unique and prominent feature. It provides flexible credit limits without monthly repayment plans or predefined due dates, creatively solving the Decentralization lending problem. Once used and borrowed, these credit limits are permanent as long as the collateral remains sufficient. This is an innovative approach to Decentralized Finance.
How does Onyx Protocol work?
Onyx Protocol operates by deploying decentralized smart contracts on the ETH blockchain. These contracts allow users to deposit digital assets, evaluate the value of collateral, and issue credit lines based on the provided collateral.
The following is the working principle of Onyx Protocol:
a) Deposit: Users deposit digital assets on the platform and enable them as collateral.
b) Evaluation: Assets are assessed based on their total value and collateral factor to determine the maximum available credit limit.
c) Credit limit: Credit limit is issued based on the value of the collateral Algorithm, without the need for traditional credit checks.
d) Borrowing: Users can borrow Ether or ERC-20 Tokens, with the Intrerest Rate determined by the yield curve of specific assets.
e) Governance: The changes to the protocol are carried out through on-chain governance proposals initiated by Onyxcoin holders.
Features of Onyx Protocol
Onyx Protocol is a platform that adopts a fully Decentralization architecture, operates through transparent, open, and trustworthy peer-to-peer Smart Contracts. Unlike traditional platforms that rely on centralized control, Onyx Protocol uses the Decentralization feature of blockchain to ensure that all transactions are transparent, secure, and immutable. The main features of Onyx Protocol include:
Onyx Protocol Application
Onyx Protocol, as a Decentralization platform, is at the core of the ecosystem, supporting peer-to-peer currency market lending. It operates through transparent and reliable Smart Contracts on the ETH blockchain. Users can access various services through the Onyx Web App, which provides a user-friendly interface.
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. Users depositing supported assets can also earn yields, which vary based on specific yield curves for each asset. Additionally, Onyxcoin (XCN) provides additional yield incentives, determined by reward rates established through on-chain governance.
To deposit assets on the Onyx Web App, users need to have a supported Wallet. To supply your assets as Collateral, please follow the steps below:
Borrowing and Credit Limit
Through Onyx Protocol, users can access aggregated and unified credit lines using deposited Collateral. Users can borrow assets such as Ethereum (ETH) or ERC-20 Tokens like USDT and USDC. The borrowing process is permanent and does not require monthly payments or maturity dates.
The steps to borrow assets on Onyx Protocol are as follows:
XCN Bridging
XCNbridge is a Decentralization platform that allows users to easily transfer their XCNToken between the ETH and BNB chains. To use this bridge, you will need a compatible and supported Wallet as well as a stable internet connection. Please follow the steps below for Tokenbridge:
Non-fungible Token Lending
Onyx Protocol supports using Non-fungible Tokens (NFTs) as Collateral. This innovative feature enhances users' borrowing ability, allowing them to unlock the value of NFTs in the lending ecosystem. Non-fungible Tokens available on Onyx Protocol include WPUNKS, BAYC, and MAYC.
XCN Staking
To stake your XCN tokens, please follow the steps below:
VUSD
VUSD is a stablecoin based on virtual US dollars, fully backed by on-chain reserves and deployed on the ETH blockchain on-chain. With a proposal approved by DAO, Onyx Protocol will add the VUSD market to its Decentralization currency market. This will allow users to supply and borrow VUSD on the Onyx Web App. Onyx has allocated 50 million US dollars worth of VUSD as collateral to facilitate the initial issuance of VUSD.
Architecture of Onyx Protocol
A few underlying concepts and technologies help Onyx drive its decentralized finance solution.
Onyx Protocol's Decentralization financial solution relies on some basic concepts and technologies. The main components are as follows:
oTokens
oTokens are the primary mechanism for interacting with the Onyx Protocol. When users mint, exchange, borrow, repay, liquidate assets, or transfer oTokens, these operations are executed through the oToken contract. oToken is a Token that complies with the EIP-20 standard, representing the balance of assets deposited by users in the protocol. Each supported asset is integrated through an oToken contract.
Through minting oTokens, users can accumulate Interest as the Exchange Rate of oToken appreciates relative to the underlying asset. In addition, oTokens can also be used as Collateral to borrow assets in the Onyx Protocol.
Protocol provides two types of oTokens: OErc20 and OEther. Both comply with the EIP-20 standard; OErc20 wraps the underlying ERC-20 asset, while OEther wraps Ether.
Comptroller
Comptroller is the risk management layer of Onyx Protocol. It determines how much Collateral users must maintain and the amount users can be liquidated. When users interact with oToken, the Comptroller is requested to approve or reject the transaction. Essentially, the Comptroller maps the user's balance to the risk weight to make a decision.
Governance
The governance and upgrade of Onyx Protocol are achieved by XCN Tokenholders through four key components: XCN Token, stake, Governance Module (Governor Alpha), and Timelock. These contracts enable the community to propose, vote on, and implement changes through the management functions of oToken or Comptroller.
Security
Through the Onyx Protocol Vulnerability Rewards Program, Smart Contract code and balances are made public for verification. Security researchers are encouraged to participate and are eligible for rewards when identifying and reporting previously undiscovered vulnerabilities that may lead to asset loss, asset freezing or user harm. Rewards will be given based on the severity and exploitability of the reported vulnerabilities.
What is Onyxcoin (XCN)?
Onyxcoin (XCN) is an ERC-20 Token based on the ETH blockchain and serves as the native utility and governance Token of the Onyx Protocol. XCN holders are automatically included in the Onyx Protocol Decentralized Autonomous Organization (DAO), and the Token plays an important role in the governance and continued development of the protocol.
Token Economic Model
The total supply of XCN Token was initially set at 100 billion units, but after burning unclaimed allocations and locking team and founder allocations, it has been reduced to 48,470,523,779 units. Currently, there are 23 billion units in circulation, while 10 billion units have been allocated to the Decentralized Autonomous Organization (DAO) for grants, incentives, distribution, and other operations. In addition, 15 billion units have been allocated to the treasury and locked in a time-locked Smart Contract, which will release 200 million XCN Tokens per month starting from April 2024, for a duration of 75 months.
XCN Token Application Cases
The correlation of XCN is not limited to Onyx Protocol, but also includes the Web3 community. Here are the Token uses of XCN:
Payment
XCN can be accessed on Decentralization and Centralized Exchange, making it available for trading, billing Settlement, and accessing services within the Onyx ecosystem.
stake
Stake is the process where holders lock their XCN to earn a specified Annual Percentage Rate (APR). Staking XCN is an investment opportunity and gives holders the opportunity to participate in the governance of the Onyx Protocol.
Governance
Onyx Protocol is fully owned and governed by XCN Tokenholders. They stake XCN Tokens to vote on protocol improvements and modifications. The minimum stake required for proposing changes to the protocol is 1 billion XCN Tokens. This governance mechanism facilitates important proposals, such as adding the VUSD market to the Decentralization currency market of Onyx Protocol.
Onyx DAO Program
The Onyx DAO represents a community-driven governance body responsible for overseeing the operation and maintenance of the Onyx Protocol. The DAO manages the Onyx Treasury and makes important decisions through on-chain voting. Onyx uses on-chain governance to promote transparent and Decentralization decision-making. In addition, Onyxcoin holders can participate in the governance process by staking their Tokens and voting on proposals that affect the protocol.
The proposal can cover a variety of changes, such as modifying the Intrerest Rate model or introducing support for new assets. Any WalletAddress holding more than 100 million XCN Tokens can propose governance actions. Once a proposal is submitted, the community has 3 days to vote. If the proposal receives a majority approval of over 200 million votes, it will be queued into Timelock and executed after a 2-day wait.
To access the DAO portal, users must have a reliable internet connection and a supported Wallet.
Here is a detailed guide to help you participate in Onyx DAO:
The user's voting power depends on the amount of XCN staked. Therefore, proposals can be created and voted on through this interface. In addition, users can view the platform's proposal history.
Onyx Gas Refund Plan
Due to the relatively high gas fees on Ethereum, the Onyx Gas Refund Plan has allocated 100,000 US dollars worth of Ether (ETH) to compensate for the gas fees incurred by users interacting with the protocol. This applies to gas fees spent on any Onyx smart contracts used in the protocol, including operations such as supply, borrowing, minting, stake, claiming, and repayment. Refunds are processed weekly, every Friday at 00:00 UTC.
Partners
Onyx Protocol has officially partnered with Wavebridge through its DAO to enhance its influence in the Asian market and promote the development of the regional community. Wavebridge is an outstanding leader in the digital asset financial field, accumulating rich experience through its high visibility collaboration in the digital asset ecosystem.
Onyx Protocol in itsMedium The account issued a statement expressing enthusiasm for this collaboration, highlighting Wavebridge's deep expertise and influence in South Korea. This strategic partnership positions Onyx Protocol as a decentralized global platform that can meet the evolving needs of its Asian community while continuing to expand and innovate.
Is XCN a good investment?
Holding XCNToken represents a partial stake in the governance of Onyx Protocol. Given the unique nature of Onyx Protocol, there is significant potential for a rise as more users adopt the platform. Additionally, innovative approaches to key challenges in Decentralized Finance, strong community support, and a well-structured tokenomics make XCN a long-term and sustainable investment opportunity. These factors may enhance investors' confidence in the potential value of XCNToken.
However, it must be recognized that Crypto Assets are highly subject to Fluctuation and speculation, and operate in a regulatory environment without consumer protection. Therefore, it is strongly recommended to seek professional financial advice, manage risks carefully, and only invest what you can afford to lose. At the same time, it is important to understand that investing in Onyxcoin (XCN) or any other Crypto Asset does not guarantee returns and may result in capital losses.
How to own XCN
You can buy XCN from centralized and Decentralization's Cryptocurrency exchange. For example, Gate.io provides XCN/USDT trading pairs. To own this Token, please create a Gate.io account and complete the registration process. In addition, you must also deposit into your Spot trading account and follow the steps to purchase XCN Token.
Highlights
Onyx Protocol Security Vulnerability
Onyx Protocol encountered a security vulnerability in November 2023, resulting in approximately 1,163.53 Ethereum (ETH) being stolen, worth $2.1 million. The exploit was carried out using a flash loan attack.
Community leader Alex Onyx has confirmed this incident through his X account and assured users that XCN tokens, its smart contract, and staking pool have not been affected. The Onyx Protocol team is actively addressing the vulnerability and preventing it from happening again in the future.
Related Reference
For updates and developments regarding the Onyx Protocol, please visit:
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