NFT
The Solana NFT space took a shot in the arm at the end of April launch of Mad Ladsa buzzy profile picture (PFP) collection that led the market-wide charts. But something else happened during the trade wave: fledgling marketplace Tensor topped the dominant Magic Eden.
Tensor launched in 2022, but saw increasing activity thereafter introduction of trade rewards in March. Last week, it captured majority market share by trading volume on Solana. Data collected by Tiexo shows a slight lead from Tensor over the past seven days, with Tensor leading 45% of Solana NFT market share and Magic Eden below 44%.
Mad Lads helped push Tensor over the top as traders apparently flocked to take advantage of the specific promotion surrounding the NFT project rather than Magic Eden’s offering. But can Tensor maintain that momentum after awakening Solana’s sleeping giant?
The Rise of Tensor
Tensor started to gain significant market share in March launched “loyalty” rewards for traders, following the move by Ethereum marketplace Blur that helped catapult it over OpenSea in February. The startup, which raised $3 million in a round led by VC firm Placeholder in March, similarly bills itself as a platform for “professional” traders with what it says is a faster, richer interface.
The Blur comparisons are intentional. Tensor looks and feels a lot like Blur, albeit for Solana, with a similar-sounding rewards initiative. The startup has not specifically said it will launch a token, but given that Blur spent hundreds of millions of dollars value of tokens in February and said he will continue to do soit’s no surprise that traders are intrigued.
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Tensor’s market share has grown steadily in recent months, says co-founder and CTO Richard Wu Decryptbut the upstart only topped Magic Eden last week after the Mad Lads frenzy took hold.
Magic Eden also offered special promotions around Mad Lads NFTs. Magic Eden offered zero marketplace fees and said it would spend 2,000 SOL (currently about $43,700) to broadcast to Mad Lads merchants for the first 30 days after launch. It later said it redistributed to 5,000 SOL ($109,400 as of today) worth of Mad Lads trading fees back to users.
Tensor, on the other hand, said it would redirect all of its marketplace fees for Mad Lads transactions for the first 90 days to buy “floor”. (or lowest price) NFTs from the project, then give them away via lottery to traders. Today Tensor tweeted that it used 4,280 SOL ($93,650) in fees to buy up 58 Mad Lads NFTs to give them away to top traders.
1/4 IT’S THAT FOCKING TIME LADS AGAIN 🎒📦
(Reminder: We refund ALL of our trading fees on ML for 3 MONTHS to 100% LOYAL USERS)
⚡️~4280 SOL In Fees Used To Beat Mad Lads In Just Over A Trading Week
⚡️58 Lads given away to MAD Tradooors TOTAL
Details👇 pic.twitter.com/k7NN3XvFSK
— Tensor | Pro NFT Trading 📈⚡️ (@tensor_hq) May 1, 2023
Whether it was the promotion or an interface aimed at heavy traders, or perhaps the combination of both, Tensor ultimately came out on top as Mad Lads dominated the Solana market.
“If you show people that you really want to give back to the community, and try to make your product the best for Mad Lads or for the next NFT project,” said Wu, “then people will come and trade on your platform , and people will tune in to a Tensor versus a Magic Eden.
War of words
There’s an “us versus them” dynamic in Wu’s comments that has been resonating in the Solana NFT community on Twitter for days now. Tensor’s sudden rise to the top of Solana has fueled the past division that arose over Magic Eden’s approach to the open-source Web3 ethosas well as his moves around optional creator royalties last year.
On Friday, Magic Eden apparently discovered that Tensor was using its content delivery network (CDN) to populate NFT images on the Tensor marketplace.
Magic Eden replaced the artwork on Tensor with images of the Magic Eden mascot and logo, tweeting, “Hey [Tensor], with image CDN? We’ve replaced some images on your marketplace. Just a harmless joke hehe. Let’s build.”
tensor uses magic edens cdn to provide images so magic eden fuck with tensor replacing the images in low volume collections pic.twitter.com/YYN4hMGWaG
— mifellas bad and based little helper (@MMifella) April 28, 2023
Magic Eden deleted the tweet on Saturday after community backlash. In recent days, the vitriol has swung back and forth on Crypto Twitter between the two camps and their supporters, and the Tensor co-founders themselves have criticized Magic Eden and retweeted other critical tweets about the giant in the Solana space.
“They sat in the dominant chair for so long that they felt like they didn’t have to do anything,” claimed Ilja Moisejevs, CEO and co-founder of Tensor, in an interview with Decrypt. He believes that Tensor’s product is better than previous challengers, but also suggested that Magic Eden lost support in the Solana space as it expanded rapidly to Ethereum, PolygonAnd Bitcoin.
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“I think the community is also a bit angry with the way they’ve been behaving for the past six months because Solana has clearly been going through some very turbulent times,” Moisejevs said.
He suggested that some Solana projects “doubled” the space amid the falling price of SOL and fear for the future of the community late last year, and believes Magic Eden did “almost the opposite” by pushing NFTs on other chains.
“They sort of took their foot off the gas then Solana was at the lowest point after FTX [collapsed], and that just rubbed the wrong way for a lot of people,” Wu added. “If you’re so optimistic about building Solana, why leave and build elsewhere at a time when Solana needed people to come forward?”
Who wins?
Magic Eden responded to the social media pushback today, as head of marketing Tiffany Huang told me The block that the startup is “excited to refocus on Solana, which is our home,” and “aims to show the Solana community that we’re still behind them.”
Huang clarified Decrypt that Magic Eden’s renewed focus on Solana will come through product features and partnerships, including “innovation” at its Diamonds reward feature which launched at the end of March when Tensor was on the rise. It will also include “programs that support creators and collectors,” she added.
She also countered criticism from Tensor’s co-founders about Magic Eden’s current closed-source marketplace model, which requires it to co-sign transactions. That throws a wrench in how market aggregators include Magic Eden listings, and raises other concerns about security and composability. But Huang suggested it’s essential – for now.
The only way for Solana to become number 1 is if all NFT protocols are permissionless.
Challenge to @MagicEden: remove your countersignature.
Let’s grow the cake together, not fight over the leftovers. https://t.co/G5Ua4DNVIw
—Richard| Tensor 🎒⚡ (@0xrwu) Apr 29, 2023
“The Tensor team knows and understands that co-sign is not just an anti-aggregation tool, it is actually a critical part of some [our] other core features of the marketplace,” she said, pointing to a tweet where Wu acknowledges so much. “The goal here is to become more open, but we just need to sequence these events so they don’t interfere with our marketplace product.”
As the Mad Lads launch hype cools, the remaining question is whether Tensor can stay on top in the Solana space. Just before publication, Magic Eden held a slight lead in rolling 24-hour trading volume per data from Tiexo– but Tensor didn’t lead that map until late afternoon today.
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Despite the shading, jokes, and complaints exchanged between the camps — not to mention the market maneuvering over the past week — both startups suggest a more cooperative tone going forward. They both want the best for Solana and her community, they say Decryptand wanting to grow the market for all parties involved, including each other.
“We should all try to build the pie with excellent user experiences and ingenuity to grow the space,” Huang told Decrypt, dismissing the idea that Magic Eden should ward off upstarts. “I think at the end of the day we are two reasonable companies trying to grow Solana.”
“We want Magic Eden to do well,” Tensor’s Moisejevs said. “That’s because we think if Magic Eden does well, Solana can do very well. At Tensor, we’d rather have a smaller slice of a 10x larger pie than a larger slice of… ultimately a pie that no one cares about.”
