01 - Peel the onions and slice into ½-inch thick rings. Separate individual rings and set aside.
02 - In a medium bowl, combine all-purpose flour, baking powder, salt, and smoked paprika; whisk until evenly blended.
03 - In a separate bowl, beat the eggs with buttermilk until the mixture is uniform.
04 - Place panko breadcrumbs in a third bowl, ensuring easy access for coating.
05 - Dip each onion ring first into the flour mixture, then into the egg-buttermilk, and finally coat thoroughly with panko breadcrumbs. Arrange coated rings on a tray.
06 - Preheat the air fryer to 400°F and let it warm for 3 minutes.
07 - Place the coated rings in a single layer inside the air fryer basket, spraying lightly with cooking spray. Cook for 10 to 12 minutes, flipping halfway through until golden and crispy. Work in batches if necessary.
08 - Simultaneously, whisk together mayonnaise, ketchup, Dijon mustard, lemon juice, garlic powder, cayenne pepper if using, and seasoning with salt and black pepper until smooth. Chill until ready to serve.
09 - Serve the hot, crispy onion rings immediately alongside the chilled dipping sauce.