The Solana NFT space got a shot in the arm with the end of April launch of Mad Ladsa buzzy profile picture (PFP) collection that led the market-wide charts. But something else happened in the middle of the trade: upstart Tensor topped the dominant Magic Eden.
Tensor was launched in 2022, but saw increasing activity after introduce trading rewards in March. Last week it took majority market share by trading volume on Solana. Data collected by Tiexo shows a slight lead by Tensor over the past seven days, with Tensor commanding 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 around the NFT project rather than Magic Eden’s offering. But can Tensor maintain that momentum after awakening Solana’s sleeping giant?
Tensor’s rise
Tensor began to gain significant market share in March launched “loyalty rewards”. for traders, reflects the movement past Ethereum marketplace Obfuscate it helped catapult it across OpenSea in February. The startup, which raised $3 million in March in a round led by VC firm Placeholder, bills itself as a platform for “pro” traders with what it says is a faster and richer interface.
The blur comparisons are intentional. Tensor looks and feels a lot like Blur, albeit for Solana, with a similar reward 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 it will continue to do soIt’s no surprise that traders are fascinated.
Tensor’s market share has grown steadily over the past couple of months, co-founder and CTO Richard Wu told Decryptbut the upstart only jumped 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 also said it would give out 2000 SOL (currently approx. $43,700) for airdrop to Mad Lads merchants within the first 30 days of launch. It later said that it redistributed over 5,000 SOL ($109,400 as of today) worth of Mad Lad’s trading fees back to users.
Tensor, on the other hand, said it would forward all marketplace fees on Mad Lads trades for the first 90 days to buy up “floor” (or the lowest price) NFTs from the project and then give them away via a raffle to traders. Today, Tensor tweeted that it has spent 4,280 SOL ($93,650) in fees to buy up 58 Mad Lads NFTs to give away to top traders.
Whether it was the campaign or an interface aimed at heavy traders, or perhaps the combination of both, Tensor finally came out when the Mad Lads ruled the Solana market.
“If you show people that you’re really about giving back to the community, and trying to make your product the best for Mad Lads or for the next NFT project,” Wu said, “then people will come and shop on your platform , and people will settle for a Tensor versus a Magic Eden.”
War of words
There’s an “us versus them” dynamic to Wu’s comments that has already reverberated throughout the Solana NFT community on Twitter for several days. Tensor’s sudden rise to the top of Solana has inflamed previous divisions that emerged over Magic Edens approach to open source Web3 ethosas well as its moves around optional royalties for the creator 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 showing the Magic Eden mascot and logo, tweeting: “Hey [Tensor], wen image CDN? We replaced some images in your marketplace. Just a harmless joke hehe. Let’s build.”
Magic Eden deleted the tweet by Saturday after community backlash. Over the past few days, vitriol has been thrown back and forth on Crypto Twitter between the two camps and their supporters, with Tensor’s co-founders themselves criticizing Magic Eden and retweeting other critical tweets about the behemoth in the Solana space.
“They were in the dominant seat for so long that they felt they didn’t need to do anything,” Tensor CEO and co-founder Ilja Moisejevs said in an interview with Decrypt. He believes that Tensor’s product is better than previous contenders, but also suggested that Magic Eden lost support in the Solana space as it rapidly expanded to Ethereum, Polygonand Bitcoin.
“I think the community is also a little upset about the way they’ve behaved over the last six months, because Solana has clearly gone through really turbulent times,” Moisejevs said.
He suggested that some Solana projects “doubled up” on the spot amid the falling price of SOL and fear for society’s future late last year, and believes Magic Eden did “almost the opposite” when pushing NFTs on other chains.
“They sort of took their foot off the gas when Solana was at its lowest point after FTX [collapsed], and it just rubbed a lot of people the wrong way,” Wu added. “If you’re so optimistic about building up Solana, why would you leave and build elsewhere at a time when Solana needed people to step up?”
Who wins?
Magic Eden responded to the backlash on social media today, as marketing manager Tiffany Huang said The block that the startup is “thrilled to refocus on Solana, which is our home,” and it “intends to show the Solana community that we still have their back.”
Huang clarified to Decrypt that Magic Eden’s renewed focus on Solana will come via product features and partnerships, including “innovation” on its Diamond reward feature which was 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 pushed back against criticism from Tensor’s co-founders about Magic Eden’s current closed-source marketplace model, which requires it to co-sign transactions. It throws a wrench into how marketplace aggregators incorporate Magic Eden listings, and raises other security and compatibility concerns. But Huang suggested it’s important — for now.
“The Tensor team knows and understands that co-sign is not just an anti-aggregator tool – it’s actually a critical part of any [our] other core marketplace features,” she said, pointing to a tweet where Wu acknowledges as much. “The goal here is to become more open, but we just need to sequence these events so they don’t disrupt our marketplace product.”
As Mad Lads launch hype balls, 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 led that chart as recently as late afternoon today.
Despite the shade, pranks and moves traded between the camps — not to mention the marketing maneuvers of the past week — both startups are hinting at a more collaborative tone going forward. They both want the best for Solana and the community, they say Decryptand want to expand the market for everyone involved, including each other.
“We should all try to build the pie with excellent user experiences and ingenuity to expand the space,” Huang said Decrypt, rejecting the notion that Magic Eden should ward off upstarts. “I think we’re two sensible companies, at the end of the day, trying to grow Solana.”
“We want to see Magic Eden do well,” said Tensor’s Moisejevs. “That’s because we believe that if Magic Eden does well, then Solana can do very well. At Tensor, we’d rather have a smaller piece of a 10x bigger pie than have a bigger piece… ultimately , a pie nobody cares about.”
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