TechFlow news: Onyx Protocol announced this morning that it suffered a security incident, in which a malicious attacker exploited a protocol vulnerability to drain a large amount of VUSD. The attack originated from a vulnerability in the NFT liquidation contract; detailed analysis can be found in PeckShield's Twitter post.
Notably, XCN staking and XCN mining functions remain unaffected. In response to this incident, Onyx DAO will vote on proposal OIP-46 to determine the protocol's next steps. The proposal recommends restarting the open-source financial network, Onyx Core, as the primary product, while retaining XCN staking to secure governance of Onyx Core.
Onyx Protocol will operate as a closed lending protocol on Onyx Core, allowing users to collateralize their NFTs and physical assets for borrowing via a global network, as well as wrap crypto assets from multiple chains.
The proposal also calls for shutting down the Ethereum-based lending market and fully compensating all affected users at a 1:1 ratio. OIP-46 will soon be launched on-chain for voting by XCN holders.
