As reported by Cointelegraph, Onyx, a decentralized finance (DeFi) protocol, is preparing to relaunch its open-source, permissioned financial network, Onyx Core, after experiencing a $3.8 million hack on September 27. The breach took advantage of a known security flaw that had not yet been addressed. On the same day as the hack, the Onyx Improvement Proposal (OIP)-46 was introduced, proposing significant modifications to the protocol, which included shutting down its Ethereum-based lending market and fully reimbursing affected lenders.

By September 29, the OIP-46 proposal garnered unanimous approval from the Onyx community, with no opposing votes. The proposal is set to be implemented on October 1. The Onyx team plans to release an updated white paper for the relaunch of Onyx Core, which will serve as a primary product, alongside staking for Onyxcoin (XCN).

The upcoming changes will transform the Onyx Protocol into a closed-ended lending system on Onyx Core, enabling users to collateralize non-fungible tokens (NFTs), real-world assets (RWA), and cryptocurrencies. The hack was carried out by exploiting an NFTLiquidation contract to artificially inflate the self-liquidation reward. Blockchain security firm PeckShield highlighted that this same vulnerability had previously compromised Onyx in October 2023. Other incidents, such as the Hundred Finance hack in April 2023, also utilized this vulnerability. The proposed restructuring aims to fortify the Onyx Protocol against future security breaches.

According to Web3 cybersecurity firm Cyvers, crypto hacks in the first three quarters of 2024 have surpassed $2.1 billion in losses, with centralized finance entities, including crypto exchanges, being the primary targets. This marks a staggering 984% year-on-year increase during the same period. The second quarter alone saw $401 million lost. While the DeFi sector experienced a 25% decline in losses compared to the previous year in Q2, it still recorded $171.3 million lost across 62 incidents.