In a skillet, cook onion in the butter until golden brown and caramelized. Set aside and let cool.
In a medium sized bowl, combine the cornmeal, flour, baking powder, baking soda, salt, and sugar. Stir to incorporate all ingredients.
Add the beaten egg and buttermilk, and stir until just combined. Fold in the cooked onions. Let the batter sit for 10 minutes.
In a deep fryer heat oil to 356 degrees. Drop the hushpuppy batter into the hot oil in tablespoon sized spoonfuls. When the hushpuppies are golden brown on the bottom and float to the top, gently turn them. Cook until the other side is brown.
Remove from oil, and drain on layers of newspaper or brown paper bags.