Introduction to Onyx Protocol

Onyx Protocol is a decentralized finance platform based on the Ethereum blockchain, providing a multi-asset supported lending solution. Compared to traditional DeFi protocols, the uniqueness of Onyx Protocol lies in its support for various tokens such as ERC-20, ERC-721, and ERC-1155, as well as an innovative credit limit model, allowing users to borrow flexibly without a fixed repayment plan. To reduce the cost burden for users interacting on-chain, Onyx Protocol has introduced a Gas refund plan to enhance user experience by reimbursing Ethereum gas fees.
In addition, Onyx Protocol is powered by Onyxcoin (XCN), which is a dual-governance and utility ERC-20 token that enables users to participate in platform governance, stake, and receive rewards.

Image Source:https://onyx.org/

XCN: The Core of Governance and Ecology

Onyxcoin (XCN) is the native token of the Onyx Protocol, supporting the following core functions:
• Governance: XCN holders can participate in the proposals and voting of Onyx DAO by staking. Proposals require 100 million XCN for initiation, and resolutions require at least 200 million XCN in voting support.
• Payment and discount: XCN can be used to pay for platform service fees, enjoy discounts on ecological products, and access advanced features.
• Staking Rewards: Holders can not only gain governance rights by staking XCN, but also receive additional rewards according to the reward mechanism set by the DAO.
Currently, the maximum supply of XCN is about 48.4 billion, part of which is used for reward and incentive mechanisms, and the other part is locked in the DAO treasury to support the long-term development of the platform.

The working principle of Onyx Protocol

The operation of Onyx Protocol relies entirely on decentralized smart contracts to provide users with transparent and trustless lending services. The working principle is as follows:
1. Deposit and Evaluation: Users deposit digital assets on the platform, and these assets will be evaluated for value and used as collateral.
2. Credit limit issuance: Calculate the maximum available credit limit based on the value of the collateral.
3. Borrowing and Repayment: Users can borrow Ethereum or ERC-20 tokens using their credit limit, and there is no need for a fixed repayment plan.
4. On-chain governance: Platform functionality and parameters are continuously optimized through proposals initiated by XCN holders.
For example, users can easily complete the entire process of asset deposit to credit limit withdrawal through the Onyx Web App, which has a user-friendly and efficient interface.

Figure:https://app.onyx.org/#/stake

Platform Highlights: NFT lending, Gas refund and multi-asset support

(1) NFT lending
Onyx Protocol supports the use of NFTs (such as BAYC and WPUNKS) as collateral, providing users with a way to unlock the value of their NFT assets. This is an innovative feature in the DeFi space, greatly enhancing users’ borrowing ability.
(2) Gas Refund Plan
To alleviate the high gas fee burden of Ethereum, Onyx Protocol has allocated $100,000 worth of ETH to compensate users for the gas fees incurred during protocol interactions. The gas fees generated by users’ operations (such as deposit, borrowing, staking, etc.) will be refunded by the platform every Friday.
(3) Multi-asset support
Onyx Protocol supports a variety of assets including Ethereum (ETH), ERC-20 tokens such as USDT, USDC, ERC-721, and ERC-1155 tokens, providing users with more diversified financial service options.

The Application and Distribution Mechanism of XCN

XCN’s use cases are not limited to governance and payments, but also include cross-chain bridging and token staking. Here are its main applications:
• Governance: XCN holders participate in platform optimization through the on-chain governance module, such as adding support for new assets or adjusting interest rate models.
• Payment: XCN can be used as a means of payment in the Onyx ecosystem for service fees and bill settlement.
• Staking: Holders can stake XCN to earn a specified annual interest rate and gain governance voting rights.
The distribution of XCN is carried out in a gradual release manner. A portion of the tokens in the DAO treasury will be released at a rate of 200 million per month starting from April 2024 and continuing for 75 months. This distribution mechanism ensures the stable development of the ecosystem.

XCN Token Distribution and Market Performance

Image source:https://huongdandaotienao.com/onyxcoin-xcn/

Image Source:https://onyx.org/
The tokenomics of XCN is closely centered around supply, distribution, and incentive mechanisms to support the sustainable development and community participation of Onyx Protocol. Here are its main features:
1. Supply
• Initial supply: 100 billion XCN.
• Current supply: After burning unclaimed tokens and locking team and founder allocations, the total supply of XCN is reduced to about 48.4 billion.
2. Allocation mechanism
• Circulating Tokens: The current circulating XCN is approximately 23 billion coins.
•DAO Treasury:
• 10 billion coins are used for subsidies, incentives, and ecological development, and other DAO-related operations.
• 15 billion locked in time-locked smart contracts.
• Release Plan: Starting from April 2024, 200 million coins will be released monthly for 75 months to ensure the long-term stability of the ecosystem.
3. Purpose
•Governance: XCN is the key token for decentralized governance of Onyx Protocol, used for proposals and voting.
•Rewards: Users receive rewards by staking XCN, while also supporting protocol security and activity.
• Payment: XCN can be used to pay for services within the Onyx ecosystem and enjoy discounts and access to advanced features.

The XCN token has recently risen significantly, with a current market value of around 1.2 billion US dollars (as of January 27, 2025). Please trade cautiously and be aware of the risks.
XCN has been listed on the Gate.io spot trading area, click to trade:https://www.gate.io/trade/XCN_USDT

Summary

Onyx Protocol has successfully addressed many pain points of traditional lending protocols through its decentralized architecture and innovative credit limit model. Its native token XCN not only provides strong support for platform governance, but also creates more value for users through a variety of use cases. In the future, with the introduction of more features and the expansion of the ecosystem, Onyx Protocol is expected to become an important player in the decentralized finance sector.