Onyx Protocol is a decentralized finance (DeFi) platform built on the Ethereum blockchain. It enables users to lend, borrow, and provide liquidity in a transparent, secure, and immutable manner. Powered by decentralized governance, Onyx Protocol ensures community-driven decision-making and the highest standards of protocol integrity.
Capital inefficiency has hindered traditional decentralized lending protocols, limiting the potential of collateral and digital assets. Onyx Protocol is a decentralized finance platform on Ethereum that lets users lend, borrow, and provide liquidity through a fully decentralized, multi-token system, with support for assets such as ERC-20 tokens as well as NFT standards including ERC-721 and ERC-1155. These platforms often suffer from narrow token support, fragmented liquidity, or centralization, making it harder for experienced crypto users and investors to put more of their holdings to work.
Onyx Protocol addresses these challenges by introducing unified access to aggregated capital and perpetual credit lines designed to improve asset utilization across multiple token types. Powered by the native utility token, Onyxcoin (XCN), the protocol also includes staking, decentralized governance, security-focused infrastructure, the XCN Bridge for cross-chain transfers, and VUSD stablecoin functionality. For readers evaluating advanced DeFi lending and borrowing options—especially those interested in using NFTs and other digital assets as collateral—this guide explains how Onyx Protocol works and where it stands out.
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: Governance is handled through the Onyx DAO, where XCN Onyxcoin serves as both a governance token and utility token; XCN is the native asset, and Onyxcoin operates on Ethereum as the native cryptocurrency for community-driven control. Onyxcoin holders and other onyxcoin holders support voting on protocol updates and community initiatives, with token holders participating in decision-making through staking.
Features of Onyx Protocol and Market Capitalization
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.
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:
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:
From the ‘Dashboard’ selected at the left-hand pane, click on the preferred asset under ‘Borrow’ (XCN is used for this stimulation).
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:
Visit the XCN bridge page, and choose the source chain and the receiving chain. Then, connect your wallet and go on to bridge.
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.
Onyxcoin XCN Staking
To stake your XCN token, follow the steps below:
Click on ‘Stake’ on the lefthand pane of the 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 and Total Supply
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. This layer is part of the protocol’s core infrastructure. The system helps with maintaining secure operation across supported markets.
Governance and Token Holders
The Onyx Protocol is governed by the Onyx DAO, a Decentralized Autonomous Organization, through four key components: staking, the governance module (Governor Alpha), Timelock, and related administrative controls. XCN is the native cryptocurrency and governance token used by token holders for voting on proposals and upgrades through the administrative functions of oTokens or the Comptroller. This supports community-driven governance across the onyx ecosystem.
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.
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.
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’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:
Launch Onyx Protocol’s Web App and connect your wallet
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.
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.
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?
Whether XCN is a good investment depends on individual risk tolerance, market conditions, and the development of the Onyx ecosystem. XCN is the native utility and governance token of Onyx Protocol, with uses including staking and participation in protocol governance. However, these utilities do not guarantee that XCN will increase in value.
Like other cryptocurrencies, XCN is highly volatile and speculative. Investors should consider factors such as market conditions, token supply and demand, protocol development, and their own risk tolerance before making an investment decision. Investing in XCN does not guarantee returns and may result in partial or total loss of capital. Always conduct independent research and consider seeking professional financial advice.
How to Buy XCN on Gate
XCN can be purchased through centralized and decentralized cryptocurrency exchanges. On Gate, users can trade XCN against USDT through the XCN/USDT trading pair. To buy XCN on Gate, create and verify a Gate account, fund your spot trading account, search for the XCN/USDT trading pair, and place an order.
For the latest information and developments, users can also refer to Onyx Protocol's Useful Reference, for updates and developments on Onyx Protocol, visit:
Onyx Protocol is a decentralized finance (DeFi) platform built on Ethereum. It provides lending and borrowing services for digital assets through smart contracts and supports multiple asset standards, including ERC-20, ERC-721, and ERC-1155.
How does Onyx Protocol work?
Onyx Protocol uses smart contracts to manage supplied assets, collateral, credit lines, borrowing, and governance. Users can deposit supported digital assets as collateral and access borrowing capacity based on the value and collateral requirements of those assets.
What is Onyxcoin (XCN)?
Onyxcoin (XCN) is the native utility and governance token associated with the Onyx ecosystem. XCN is used for governance and staking, allowing token holders to participate in protocol decisions and ecosystem activities.
What are Onyx Protocol credit lines?
Onyx Protocol credit lines allow users to borrow against supported collateral without a fixed monthly repayment schedule or predefined expiration date. A credit line can remain available as long as the user's collateral meets the required conditions.
How can I buy XCN?
XCN can be purchased through cryptocurrency exchanges that support the token. On Gate, users can trade XCN against USDT through the XCN/USDT trading pair.
Author: Paul
Translator: Viper
Reviewer(s): Piccolo、Matheus
Translation Reviewer(s): Ashely
Disclaimer
* The information is not intended to be and does not constitute financial advice or any other recommendation of any sort offered or endorsed by Gate.
* This article may not be reproduced, transmitted or copied without referencing Gate. Contravention is an infringement of Copyright Act and may be subject to legal action.
Yala is a modular Bitcoin DeFi infrastructure that connects BTC liquidity with multi-chain ecosystems through its YU stablecoin and MetaMint protocol. It enables Bitcoin holders to earn native DeFi yields across EVM and non-EVM networks securely and seamlessly.
Solana faces both opportunities and challenges in its development. Recently, severe network congestion has led to a high transaction failure rate and increased fees. Consequently, some have suggested using Layer 2 and appchain technologies to address this issue. This article explores the feasibility of this strategy.
Sui is a PoS L1 blockchain with a novel architecture whose object-centric model enables parallelization of transactions through verifier level scaling. In this research paper the unique features of the Sui blockchain will be introduced, the economic prospects of SUI tokens will be presented, and it will be explained how investors can learn about which dApps are driving the use of the chain through the Sui application campaign.
This article introduces the technical principles, framework, and applications of Zero-Knowledge (ZK) technology, covering aspects from privacy, identity (ID), decentralized exchanges (DEX), to oracles.
TronScan is the primary blockchain explorer for the TRON network. It allows users to check TRX and TRC-20 transactions, inspect wallet balances, analyze smart contracts, monitor tokens, and view network activity without logging in. By connecting a compatible wallet such as TronLink, users can also transfer assets, stake TRX, vote for Super Representatives, and interact with TRON ecosystem applications.
