The Onyx hack led to a massive withdrawal of XCN Tokens

Onyx is a cross token liquidity market that appears to be in limbo, trying to figure out the best way to recover from the hack of November 1, when the Web3 Project lost more than $2 million.

After the DAO leaders rejected the first two reimbursement plans, which offered the community the choice of using the DAO's treasury to compensate for hacks or depending on Strike Finance who was ready to takeover the protocol, they introduced the third proposal. The proposal focused on the use of the XCN DAO in order to resolve financial issues, while preserving Onyx and the XCN token. The plan included reducing inflation, changing staking rewards and winding down the lending markets.

Onyx Community tries to save the project with a new proposal

Onyx's community came up with a new proposal after the rejection of the old one. It was defeated as well on 25 November, despite a strong showing of support. Six addresses voted in favor with a total of 64,69 million votes and 11 addresses voted against with 260 million votes.

The Onyx team then proposed a new plan. They suggested the launch of Onyx V2 with an emphasis on primary markets. The proposal aims at maintaining current stake rates to encourage governing XCN stakeholders. The strategy also suggests redeploying NFT money markets in v2 market, with only ETH and WBTC lending markets and continuing support for all three NFTs.

READ  Video Generation: ByteDance's MagicVideo-V2 outperforms Pika, SVD XT and SVD 1.0?

Source: Onyx

The proposal has received support from 14 addresses, a total of 250.38 millions votes, and no votes have been cast against it. However, some members of Onyx's community are concerned about the lack of a clearly defined reimbursement plan.

The recovery strategy will include a snapshot of the user balances as v1 ends to create a plan for ongoing recovery. The recovery strategy explains that these high-revenue assets can be used to support the recovery plan.

Read on: Onyx Community rejects Strike Finance's proposal for Protocol acquisition

A number of community members also expressed their distrust, raising concerns over a large withdrawal, estimated at almost half a mil dollars as at the time of press, which was worth nearly 500 million XCN. The withdrawal took place two days after hacking, causing investors to worry about the possibility of an unauthorized withdrawal. The withdrawn XCN were divided between multiple wallets, and then moved to exchanges.

Alex, the DAO leader, explained that "Whales staked tokens or supplied XCN before the hack and, after they learned about the incident, withdrew the tokens from the protocol because they were confused as to whether it was safe for them to keep the staked tokens."