01 - Peel onions and slice into ½-inch thick rings. Separate rings and set aside.
02 - In a medium bowl, whisk together flour, baking powder, salt, and smoked paprika.
03 - In another bowl, beat eggs with buttermilk until thoroughly combined.
04 - Place panko breadcrumbs in a separate bowl for breading.
05 - Dip each onion ring first into the flour mixture, then into the egg and buttermilk mixture, and finally coat evenly with panko. Arrange coated rings on a tray.
06 - Preheat the air fryer to 400°F (200°C) for 3 minutes.
07 - Place coated onion rings in a single layer in the air fryer basket, spraying lightly with cooking spray. Air fry for 10 to 12 minutes, flipping halfway through, until golden and crisp. Work in batches if necessary.
08 - While the onion rings cook, mix mayonnaise, ketchup, Dijon mustard, lemon juice, garlic powder, cayenne pepper (if using), salt, and black pepper in a small bowl until smooth. Refrigerate until serving.
09 - Serve hot onion rings alongside the chilled dipping sauce.