Onyx Set to Relaunch After $3.8 Million Hack, Backed by Community Vote

Key Takeaways

• The updated plan includes a revised white paper for Onyx Core, which will be a primary product alongside staking opportunities with Onyxcoin.
• As part of the relaunch, Onyx will operate as a closed-ended lending protocol, supporting NFTs and crypto assets

The decentralized finance (DeFi) platform Onyx has gained approval from its community to relaunch its core network, Onyx Core, following a $3.8 million hack on September 27. The attack exploited a known vulnerability in the protocol, but despite this setback, the community has voted in favor of a proposal to improve the platform’s security and governance.

Shortly after the breach, the Onyx team put forward Onyx Improvement Proposal (OIP)-46, titled “Relaunch Onyx Core.” The proposal outlined plans to shut down Onyx’s existing Ethereum-based lending market and fully reimburse lenders with a 1:1 return on the assets they had contributed. The goal is to relaunch a more secure version of the platform while enhancing its governance structure.

By September 29, the community had overwhelmingly supported the proposal with no objections. The relaunch is scheduled for October 1 and the updated plan includes a revised white paper for Onyx Core, which will be a primary product alongside staking opportunities with the native token, Onyxcoin (XCN).

The hack was traced to a manipulation of an NFT liquidation contract, where the attacker inflated self-liquidation rewards. Security firm PeckShield confirmed that this same vulnerability had been exploited in a previous attack on Onyx back in October 2023. Despite warnings, the flaw remained unaddressed, leading to the recent breach.

As part of the relaunch, Onyx will operate as a closed-ended lending protocol, supporting non-fungible tokens (NFTs), real-world assets, and other crypto assets. The community’s swift approval reflects strong support for Onyx’s restructuring efforts, as it aims to strengthen security and improve user trust.

Onyx is one of many DeFi protocols that have faced large-scale attacks, with recent flash loan incidents affecting platforms like Euler Finance, which lost $196 million, and Hundred Finance, which saw $7.4 million stolen.