Peel the onion and slice into large rings; separate the rings and place them on a plate.
Prepare a breading station with three shallow dishes: 1/4 cup all-purpose flour in the first, 1 large egg beaten in the second, and 1/2 cup Panko breadcrumbs in the third.
Working one ring at a time, dredge each ring in the flour (shake off excess), dip in the beaten egg to coat, then press into the Panko so the crumbs adhere. Place the breaded rings on a clean plate while you finish coating the rest.
Pour 1 1/2 cups vegetable oil into a medium saucepan and heat over medium until the oil reaches 350°F (use a thermometer).
Fry a few onion rings at a time (do not overcrowd) until golden brown on one side, flip, and cook until golden brown on the other side—about 1–2 minutes per side.
Transfer fried rings to a paper towel–lined plate to drain excess oil.
In a shallow dish, whisk together the 4 tablespoons melted butter and 1/4 cup hot sauce until combined.
Place a cooling rack on a baking sheet and preheat the oven to 400°F.
Dip each fried onion ring into the buffalo sauce to coat, then place the coated rings on the cooling rack (allow excess sauce to drip onto the baking sheet).
Bake the sauced onion rings in the preheated 400°F oven for 5–7 minutes to crisp. Remove from the oven and serve.