Microwave the frozen pearl onions for about 2 minutes on high to soften slightly.

In a bowl, crack and beat the egg until well mixed.

In another bowl, whisk together flour, paprika, salt, black pepper, cayenne pepper, and garlic powder.

Drain the microwaved onions and dry them well.

Dip each onion in the flour mixture, then into the beaten egg, and back into the flour for coating.

Refrigerate coated onions for about 10 minutes to allow the coating to set.

Preheat air fryer to 380°F, arrange onions in a single layer, spray lightly with oil, and air fry for 6 minutes, shaking halfway.

Let cool for a minute before serving with dipping sauces.