Onyxcoin (XCN) is the governance and utility token of the Onyx Protocol, a Layer 3 blockchain network developed on Arbitrum Orbit with settlement secured by Coinbase’s Base Layer 2. XCN powers Onyx’s decentralised governance system and also acts as the native gas token for all transactions, smart contract execution, and protocol interactions across the network.

Originally developed as Chain Token, XCN retained its ticker following a governance-approved rebrand in 2023 that renamed the Chain Protocol to Onyx Protocol and the associated DAO to Onyx DAO. This rebrand marked a shift towards clearer separation between decentralised protocol governance and Chain.com’s centralised business operations.

Onyx is built to address the scalability and cost-efficiency limitations of Layer 1 and Layer 2 chains by offering high-throughput, application-specific execution environments. It uses Arbitrum Nitro for full EVM compatibility and advanced fraud-proof security, AnyTrust for data availability, and Base for cost-effective economic settlement.

XCN supports multiple functions within the Onyx Protocol:

• Gas Fees: XCN is used to pay transaction fees and execute smart contracts on the Onyx Layer 3 chain.

• Staking: Users can stake XCN to gain governance voting rights and receive staking rewards.

• Governance: Staked XCN enables participation in the Onyx DAO, where holders propose and vote on protocol upgrades, economic parameters, and funding allocations.

• Bridging: XCN is bridgeable across Ethereum, Binance Smart Chain, Base, and Onyx via Superbridge and Wormhole.

• Customisation: Developers can build application-specific fee structures and integrate fee delegation using XCN.

Onyx also supports meta-transactions, allowing users to interact with dApps without directly holding XCN, with applications subsidising gas fees if needed.

In January 2023, a governance vote approved a major rebrand:

• Chain Protocol became Onyx Protocol

• Chain DAO became Onyx DAO

• Chain Token became Onyxcoin (XCN)

The rebrand aimed to create clear separation between Chain.com’s enterprise services (such as Sequence and Chain Cloud) and the decentralised governance structure of the protocol. Utility and function of the XCN token remained unchanged.

The rebrand was accompanied by two structural changes:

• The entire 5 billion XCN team allocation was burned

• 15 billion XCN was donated to a newly formed non-profit

These changes were aimed at reinforcing decentralised control over the protocol.

Onyx operates as a Layer 3 blockchain built on Arbitrum Orbit and secured by Coinbase’s Base:

• Execution: Powered by Arbitrum Nitro, with EVM compatibility, fraud-proof validation, and parallelised execution

• Data Availability: Uses AnyTrust, with off-chain storage and fallback to Ethereum for data recovery

• Settlement: Utilises Base Layer 2 for batch settlement before Ethereum finality

• Customisability: Developers can deploy isolated, application-specific rollups with tailored governance, fees, and execution logic

XCN is integrated with EIP-1559, introducing a base fee model with partial on-chain burns, contributing to a deflationary supply effect.

Governance of the Onyx Protocol is administered through the Onyx DAO, a smart contract system on Ethereum. Key features include:

• Proposal Threshold: Minimum 100 million staked XCN required to submit proposals

• Voting Requirements: 200 million XCN quorum and majority approval needed

• Timelock: Successful proposals have a 2-day delay before execution

• Guardian Wallet: A security mechanism with the ability to cancel malicious proposals

Staking is required for governance participation. XCN staked on Ethereum determines voting weight and eligibility, and participants may receive protocol-defined rewards.

XCN supports multi-chain functionality:

• Wormhole Bridge: Transfers between Ethereum and Binance Smart Chain

• Superbridge: Transfers between Ethereum, Base, and Onyx Layer 3

Onyx provides cross-chain asset transfer, smart contract messaging, and seamless integration with Ethereum-based tooling.

Onyx integrates various infrastructure and development tools:

• Onyx SDK: A TypeScript SDK for asset bridging, message passing, and smart contract interaction

• Thirdweb and Tenderly: Toolkits for smart contract deployment and monitoring

• Privy: Secure user data management and login abstraction

• Decent: NFT minting and digital asset infrastructure

• Bridged USDC: Stablecoin support for DeFi applications

Developers can deploy application-specific chains, define custom governance logic, and scale dApps through Onyx’s high-throughput Layer 3 framework.