Onyx Protocol introduces USDO, a privacy-preserving USD-pegged stablecoin backed by Zcash (ZEC) and secured on the Aztec network. Unlike traditional stablecoins that sacrifice privacy for transparency, Onyx combines:

• ** Privacy**: All balances and positions are shielded using Aztec's zero-knowledge rollup
• ** Real Collateral**: Every USDO is backed by ZEC held in verified reserves
• ** Dynamic Risk Model**: Three-zone minting function that adapts to market conditions
• ** Time-Based Rewards**: Redemption bonuses that reward long-term holders
• ** Volatility Buffer**: Absorption pool to smooth out ZEC price swings

Onyx uses a three-zone minting system that adjusts USDO issuance based on ZEC price:

• Zone 1 (High Confidence): P ≥ Threshold → Generous minting with surplus capture
• Zone 2 (Caution): Floor ≤ P < Threshold → Conservative minting gets tighter
• Zone 3 (Emergency): P < Floor → Strict capital preservation mode

Surplus value above the conservative floor is tokenized as xUSDO, allowing risk-takers to capture upside while protecting USDO stability.

Accumulates excess collateral during strong markets to provide a buffer during downturns and support peg maintenance.

┌─────────────┐         ┌──────────────┐         ┌─────────────┐
│   Zcash     │  ─────> │ Aztec Bridge │  ─────> │   Aztec     │
│  (Privacy)  │<─ ZEC ─>│   (Custody)  │<─ Mint ─>│  (Privvacy) │
└─────────────┘         └──────────────┘         └─────────────┘
                                                         │
                                                         ▼
                                        ┌──────────────────────────┐
                                        │   Onyx Smart Contracts   │
                                        │  ┌────────────────────┐  │
                                        │  │  UsdoVault (Core)  │  │
                                        │  ├────────────────────┤  │
                                        │  │   USDO Token       │  │
                                        │  │   xUSDO Token      │  │
                                        │  │   PriceOracle      │  │
                                        │  └────────────────────┘  │
                                        └──────────────────────────┘

• UsdoVault: Core protocol logic, minting/redemption, zone calculations
• USDOToken: Private stablecoin token (Aztec native)
• XUsdoToken: Private bond token for surplus exposure
• PriceOracle: ZEC/USD price feed
• ZToken: Wrapped ZEC on Aztec (testnet)

# Install Aztec CLI
bash -i <(curl -s https://install.aztec.network)

# Install Node.js dependencies
npm install

# Compile all Noir contracts
aztec-nargo compile

# Generate verification keys
aztec-postprocess-contract target/*.json

# Patch artifacts for deployment
node --loader ts-node/esm scripts/patch_artifacts.mts

# Start Aztec sandbox (in one terminal)
aztec start --sandbox

# Deploy contracts (in new terminal)
cd scripts
node --loader ts-node/esm deploy_mixed.mts

Contracts will deploy to your local sandbox at http://localhost:8080.

cd frontend
npm install
npm run dev

Visit http://localhost:3000 to see the landing page.
Visit http://localhost:3000/app for the vault interface (demo).

onyx/
├── contracts/           # Noir smart contracts
│   ├── PriceOracle/
│   ├── usdo_token/
│   ├── xusdo_token/
│   ├── usdo_vault/      # Core vault logic
│   └── ZToken/
├── frontend/            # Next.js web app
├── scripts/             # Deployment & testing scripts
├── src/artifacts/       # Compiled contract artifacts
└── whitepaper.tex       # Technical whitepaper

When ZEC price P_m >= P_t (threshold):

USDO_minted = x * P_f * (1 + β)
xUSDO_minted = x * (P_m - P_f) * (1 - γ)

Where:

• x = ZEC deposited
• P_f = Floor price ($100)
• β = Bonus factor (0.01)
• γ = Protocol fee (0.1)

RV(U, t) = U * [1 + φ * (P_m/P_f - 1) * e^(-λ⋅Δt)]
ZEC_out = RV(U, t) / max(P_m, ψ⋅P_f)

Where:

• φ = Participation factor (0.7)
• λ = Decay constant (0.02/day)
• ψ = Floor protection (1.1)

See whitepaper.tex for complete mathematical specification.

• Phase 1: Core protocol implementation
  • Three-zone minting logic
  • Time-based redemption
  • VAP tracking
  • Emergency modes
• Phase 2: Testnet launch
  • Real Zcash bridge
  • AMO controller for peg maintenance
  • Extended testing
• Phase 3: Mainnet preparation
  • Security audits
  • Governance token (ONYX)
  • zk-Solvency proofs
• Phase 4: Ecosystem growth
  • DEX integrations
  • Cross-chain support
  • Community governance

Onyx is open source and welcomes contributions! Please see CONTRIBUTING.md for guidelines.

# Format contracts
aztec-nargo fmt

# Run linter
npm run lint

# Build frontend
cd frontend && npm run build

Built with ❤️ by Onyx Labs

• SerPepe (@SerPepeXBT) - Protocol Design & Development

• Aztec Network - Privacy-preserving rollup infrastructure
• Zcash - Pioneering privacy at the base layer
• Noir - Zero-knowledge DSL