Tensor: Being Forged by Peak Dimensions

Key Takeaways

• Rather than merely aiming for the success of individual applications, Tensor—originally starting out as an NFT marketplace—seeks to serve as the gateway through which billions of users can access on-chain finance.

• To achieve this goal, Tensor followed up its NFT marketplace by focusing on the fusion of hyperfinancialization and social elements, introducing “Vector,” a social trading platform, as its second product.

• Despite being a small team, Tensor is the only one that has proven—through two consecutive product launches—its ability to rapidly break into a market dominated by established competitors and emerge as an industry leader.

• Tensor aims to organically connect its application ecosystem around TNSR and align incentives across the entire community, so everyone can benefit and grow together. The combined annual revenue from the Tensor NFT Marketplace and Vector has already reached tens of millions of dollars, half of which goes to a treasury composed of TNSR holders—an arrangement expected to boost the value of TNSR.

• True to the meaning of “Tensor,” which spans multidimensional concepts, the Tensor ecosystem is poised to continue expanding by exploring and integrating new frontiers beyond NFTs, meme trading, and social features.

1. Introduction

Smart contract platforms allow the programming of tokenized value, making it easy for each platform to build its own economic system. One interesting phenomenon that emerges is how quickly users switch and onboard to platforms that provide them the greatest utility.

This trend compels projects to constantly ponder how to provide real value for users—both economically and non-economically—and to respond nimbly to the rapidly changing sentiment of the Web3 market. As a result, the entire industry has been researching more advanced and sustainable tokenomics, and platforms capable of offering greater utility have emerged quickly to experiment with adoption.

Tensor, which we will explore today, is also one of the noteworthy teams sending out a meaningful message in this evolving market. After first appearing as an NFT marketplace thanks to winning a Solana hackathon, Tensor raised the bar for NFT marketplaces through its innovative UX/UI, participant-friendly fee policies, and initiatives that return value to the ecosystem, swiftly taking over the Solana NFT market and making its presence known.

By surpassing Magic Eden—the dominant NFT marketplace at the time—Tensor proved its keen insight into market participants and its rapid execution. Now, going one step further, it has launched Vector, a meme-coin social trading platform, with the goal of innovating the social trading field and creating an integrated Tensor ecosystem.

What will Tensor—known for its remarkable features through a differentiated approach—reveal this time with Vector? And as Tensor swiftly adapts to trends and rolls out various initiatives, what is the ultimate vision the Tensor ecosystem aims to accomplish?

2. Tensor's Vision Extends Far Beyond Just Being an NFT Marketplace

Despite its strong image as a leading NFT marketplace in the Solana ecosystem, several interviews suggest that Tensor did not originally plan to focus solely on an NFT marketplace. Instead, its attention was set on “becoming the gateway through which billions of consumers discover onchain finance” and achieving “innovation” that would onboard the users. In other words, Tensor’s NFT marketplace was just one of many dimensions aimed at fulfilling this larger mission.

This overarching mission is evident in its concentrated effort to develop another product called Vector, as well as in its rationale for choosing Solana as the underlying infrastructure for all these initiatives.

As we will examine in more detail later, following the NFT marketplace, the Tensor team quickly captured the retail investors’ movements and searched for clues about the next wave of large-scale adoption. Concluding that this clue lay in the convergence of meme coins and social elements, it made the existing Tensor NFT marketplace stack open source and focused on rapidly developing a SocialFi application that could deliver a new social trading experience to users.

Tensor’s commitment to innovation is also clear from the reasons it gives for specifically building on Solana - in another interview with Blockworks, the Tensor team underscored that it places a high value on Solana because it is one of the powerful ecosystem with both the technological foundation that allows a variety of experiments for innovation and an actual user base that can provide swift feedback.

In short, what Tensor is doing now is actively experimenting with consumer applications across various asset classes—including NFTs and memes—rather than confining itself to a single category, all with the goal of bringing billions of people into onchain finance.

3. The First Dimension of Tensor: NFT Marketplace

3.1 Three Key Pillars of Tensor NFT Marketplace’s Growth Strategy

Innovating means offering the best experience to as many consumers as possible so they choose your platform. Consequently, a multi-dimensional approach is needed to define the types of experiences the platform can deliver, ensuring that as many consumers as possible benefit.

Tensor has carefully operated its NFT marketplace across three key areas to provide the best possible experience to all participants. As a result, it successfully penetrated Magic Eden’s market share—Magic Eden had been building steadily since 2021 with a large base of loyal customers—and continues that momentum to this day.

Enhanced UX & Intuitive UI Tailored to User Types

Source: tensor.trade

First, Tensor’s NFT marketplace stands out visually from other platforms. One of Tensor’s greatest strengths is its trader-friendly, intuitive interface. While competitors typically offer a one-size-fits-all UI, Tensor distinguishes between “Pro” traders and general collectors, offering each group a customized UI.

For Pro traders, Tensor’s UI focuses on advanced features and analytical tools, resembling a genuine trading terminal rather than a simple gallery. It includes real-time order books, candlestick charts, bulk buying/selling, automated trading features, and more—covering the functions essential for veteran and arbitrage traders. This approach successfully attracted and satisfied their needs.

On the other hand, for general collectors, Tensor offers a “Lite” mode with reduced complexity, focusing on a more intuitive and simplified user experience. By employing this dual-mode strategy—Pro vs. Lite—Tensor has managed to appeal to all types of NFT traders without sacrificing advanced functionality, driving rapid growth in market share.

New Utility with Innovative Features

Beyond its intuitive UX/UI, Tensor has continually pushed technical boundaries by swiftly integrating a range of innovative features that maximize the potential of the NFT marketplace.

Examples include its active support for compressed NFTs (cNFT)*, Inscriptions**, and royalty enforcement*** standards in the Solana ecosystem. This allows creators to choose cheaper, more flexible minting options while ensuring their rights are safeguarded, and traders benefit from exposure to a wider variety of collections.

Additionally, Tensor introduced a new trading model to tackle the chronic liquidity issues plaguing the NFT market. Because NFT assets inherently lack liquidity and marketplaces are fragmented, Tensor became the first in the industry to support an AMM (Automated Market Maker) liquidity pool that aggregates multiple NFT marketplaces.

Tensor also introduced a “Price Lock” feature, which works similarly to options trading. This enables traders to take a long or short position on NFTs by paying only a minimal upfront fee, effectively bringing leverage trading concepts to the NFT space for the first time. Traders can employ more complex and diverse strategies beyond simple buying and selling.

By quickly optimizing and implementing cutting-edge technology in the NFT marketplace and promptly identifying solutions to address user pain points, Tensor has not only created more earning opportunities for a broader user base and enhanced user experience for all participants, but also significantly improved liquidity in the Solana NFT market.

*Compression refers to a technology that uses a Merkle tree structure to store and manage information on the blockchain ledger rather than in expensive account space, making it especially suitable for handling large amounts of data (e.g., NFTs).

**Inscriptions involve issuing assets by recording all information directly on-chain instead of relying on a separate standard.

***The royalty enforcement policy is implemented using the pNFT (Programmable NFT) format developed by Metaplex. Unlike previous NFT marketplaces, where marketplaces themselves decided whether to apply royalties, pNFT is designed so that creators can set royalties themselves when launching a collection, aiming to protect creators’ rights more decisively.

Incentive Policies for the Sustainable Ecosystem

Source: tensor.trade/rewards

Tensor’s growth driver lies not only in its UX or its adoption of innovative technology, but also in its ability to build a sustainable community flywheel that benefits traders, creators, and even potential external developers.

First, Tensor runs points-and-rewards programs for all community members who use its NFT marketplace, providing significant benefits for loyal community participants. Traders accumulate points for trading, bidding, and providing liquidity each season, which they can then exchange for real rewards (NFT airdrops, mystery boxes, whitelists, token allocations, etc.)* - notably, in April 2024, points from Tensor’s first three seasons were converted into a TNSR token airdrop worth hundreds of millions of dollars—accounting for 12.5% of the total circulating supply—and distributed to the platform’s most loyal users.

Tensor also aims to build an open ecosystem, extending its incentives to potential developers who may build on the Tensor protocol. At Breakpoint in September 2024, Tensor announced the Open NFT Finance Layer initiative, open-sourcing all its marketplace protocols, and introduced a model where 50% of fees from products built on this open-source code are shared with the relevant developers**. This approach encourages community-driven development and aligns incentives for sustainable growth.

*One of the most popular reward events within the community was when the Mad Lads NFT first launched and drew significant attention. During the first three months of trading for that collection, all fees generated were returned to the community. The fees collected were used to purchase a floor-price Mad Lads NFT, which was then raffled off to highly active traders.

**The other 50% goes to Tensor’s treasury. Assets held by the Tensor Foundation’s treasury are used to fund ecosystem grant programs and offer financial support to developers and teams building innovative applications on top of the Tensor protocol.

Source: tensor.trade/shipyard

In addition, on August 8, 2023, Tensor launched its own NFT collection, Tensorians. Participants who held and staked Tensorians received a variety of benefits, including special features for Tensorians (e.g., Swapsorian, Stakesorian, etc.), point rewards, partner creator rewards, and priority access to beta tests. This helped Tensor provide distinct value to its core community members and further solidify the community.

In short, by proactively offering a variety of incentives to community participants, Tensor has demonstrated that it prioritizes community contributions over short-term profit. As a result, it has cultivated strong trust and loyalty, which have significantly contributed to the overall expansion of its ecosystem.

3.2 Statistics on Tensor NFT Marketplace

Combining its innovative UX/UI, participant-friendly operational policies, and benefits for the community, Tensor’s NFT marketplace built a robust virtuous cycle of growth, successfully attracting dedicated users. Having almost 0% market share at launch, Tensor reached over 70% share in about 16 months, proving it could shake even the strongest incumbent competitors.

Since then, Tensor has sustained that momentum. Over the past three months, it has surpassed Magic Eden in trading volume, buyers, and transactions, and has shown significant performance in unique wallets and sellers—maintaining over 40% share in those metrics.

4. The Second Dimension of Tensor: Vector

The lessons learned from running the NFT marketplace successfully led the Tensor team to develop Vector, Tensor’s second major innovative venture. Vector was first publicly mentioned at last September’s Breakpoint, alongside the announcement that the NFT marketplace would go open source.

As interest in the NFT market waned, the Tensor team noticed the attention economy centered on meme coins, hyperfinancialization, and social elements. Reflecting these trends, Vector was designed to maximize network effects and the viral nature of meme assets. After its public launch in November last year, it recorded a remarkable $25 million in daily trading volume in just two months, demonstrating explosive growth.

Just as it did with its NFT marketplace, Tensor was able to post such big achievements in a short period thanks to its in-depth understanding of the assets being traded and its focus on providing maximum utility to all participants.

4.1 Three Key Pillars of Vector’s Growth Strategy

Enhanced UX & Intuitive UI Tailored to User Types

Source: Vector

First, Vector established a foundation for a simpler and more enhanced crypto trading experience. Its embedded wallet support via Privy allows users to create accounts easily using social logins such as Twitter, email, or Google. By abstracting away complex on-chain interactions, Vector makes the overall user experience more familiar and straightforward.

Vector also displays trending tokens on various blockchains—Ethereum, Solana, Base, Abstract, Vera, Bitcoin (Runes)—over specific time frames, and it includes a “Demon” mode to help traders quickly discover newly launched tokens. This design caters to the diverse needs of different user segments.

Lastly, to ensure smooth transactions for multiple assets, Vector has built its own backend infrastructure by combining technology stacks like Jupiter, bloXroute, Temporal, and Jito. This setup enables swift transaction processing across multiple blockchain networks.

New Value Creation Through Innovative Features

Source: Vector

Vector noticed that retail users actively trade a wide variety of constantly emerging meme tokens, instead of sticking to just a few established crypto assets. As a result, it anticipates a future where tens of millions—even hundreds of millions—of assets will be tokenized and traded, and that social elements around these tokens will play a crucial role.

Based on this outlook, Vector reinforced its social features on top of its highly optimized trading functions. Traders can view each other’s on-chain portfolios and past transaction histories, including PnL, in a transparent manner, and they can follow one another, form groups*, and engage in a more social trading environment through those information.

*Vector supports a Telegram bot (@VectorTGBot) to facilitate smooth communication and sharing of trading information among group members.

Source: Vector

Another noteworthy feature is “Broadcasts.” When traders enter a position on a particular token, they can broadcast their entry info in real time for 3 minutes and share the Token URL. Other traders can see this information, discuss it, or even follow it to make trades. If third-party traders participate via a broadcast, a portion of the profits is shared with the broadcaster.

This setup encourages users not just to trade assets individually, but to interact socially and trade together. Moreover, high-performing traders can acquire social clout as “trophies,” which gives them greater influence within the Vector app. Such gamification by combining both cooperative and competitive elements makes trading more engaging and naturally aligns users’ interests with the platform’s growth.

Incentive Policies for the Sustainable Ecosystem

Much like its NFT marketplace, Vector’s operations focus not just on providing functionally superior user experiences but also on returning tangible benefits to all participants who help grow the ecosystem.

Source: Vector

Currently, Vector allocates 0.2%p of its 1% transaction fee as referral rewards and another 0.2%p as broadcast rewards. The remaining 50%—that is, 0.3 %p —is allocated to Tensor's Treasury.

However, to further recognize and reward traders who use the platform more enthusiastically and contribute to Vector’s growth, Vector also discretionarily selects particularly active users, designating them as “VOL (Vector Opinion Leader)” or “GOD,” and offering them higher levels of compensation* - these rewards are distributed from a bonus pool funded by a portion of the protocol’s revenue.

Initially, Vector operated on an invite-only basis, giving priority to select NFT holders or those who held Tensorians, thereby highlighting exclusivity and rewarding members of Tensor’s longstanding core community.

*As a basic requirement, users must achieve at least $100,000 in monthly trading volume and complete at least 10 broadcasts.

4.2 Statistics on Vector

In short, Vector offers an environment in which users can freely enjoy social trading, providing straightforward ways to share transparent transaction data and opinions. In particular, the group feature—where like-minded individuals can interact—naturally fosters camaraderie among participants, and each trader’s transactions act as content that can drive user acquisition in a viral loop.

Moreover, users can follow the traders they like, get notifications about trades, and learn strategies, cultivating an atmosphere that is both cooperative and competitive. Skilled traders continually gain recognition and rewards, while newcomers can observe seasoned experts to improve. This structure is merit-based, rather than relying on existing social capital, so promising traders can grow and compete fairly on a level playing field.

Thanks to this refined approach, Vector’s user base and trading volume grew rapidly even though it started as an invite-only platform. Within three months of launching, its cumulative trading volume reached $500 million.

Even more noteworthy is that there has not been a significant drop in the user base after the high-profile token launches of $TRUMP (January 17) and $MELINDA (January 20), which attracted worldwide attention.

As shown in the graph above, new users kept joining even after those events, and as of February 22 (the time of writing this article), the cumulative daily user count was about 25,000. Returning wallets have consistently outnumbered new wallets, indicating that once users experience Vector, they tend to keep coming back.

Even after the active meme coin trading period from December to January, Vector still maintains over 3,000 daily users (i.e., returning wallets plus new wallets).

5. TNSR's Value Expansion via Vector Integration

Tensor’s ultimate aim is to build an innovative consumer application platform that goes beyond the success of individual applications. To that end, Tensor seeks to construct an interconnected application ecosystem and align incentives with a supportive community so that every participant can find utility and grow together. In other words, rather than simply focusing on revenue, it strives to form a detailed ecosystem where all can contribute to a sustainable economic flywheel and be rewarded in turn.

This vision is highlighted by the fact that Tensor allocates half of the fees collected—excluding the portion each platform needs for its own economic sustainability—from the NFT marketplace and Vector to the TNSR treasury. As noted, the funds in this treasury can be used for ecosystem-wide community rewards or to buy back and burn the TNSR governance token, providing direct or indirect economic benefits for the TNSR-holder community.

Put differently, TNSR governs both the Tensor and Vector protocols and serves as the core asset that accumulates value from all fee revenues in the Tensor ecosystem.

Hence, if a virtuous cycle occurs in the Tensor ecosystem and enough value accrues such that the community realizes substantial utility, the advantage will ultimately flow back to the TNSR-holder community, potentially boosting TNSR’s value.

For instance, given that Vector’s revenue has not yet been integrated into the Tensor ecosystem, the community’s annualized earnings through the TNSR treasury over the last three months are estimated at around $3.82 million. However, since Vector will not solely focus on its own flywheel but instead fully integrate with the Tensor ecosystem, the TNSR community’s annual revenue could rise to $9.89 million, effectively increasing the relative holding value of TNSR by approximately 2.59 times.

Of course, these figures may change depending on token lockup schedules* and each platform’s performance. Yet if Vector maintains at least half its current performance after its lockup period, TNSR’s value outlook remains positive. Moreover, if the Tensor ecosystem continues to generate stable revenue in the long term and sets up a system to deliver more of tangible benefits to TNSR holders, demand could easily surpass supply pressures.

6. More Dimensions Ahead, All in Tensor

Tensor is an overarching concept that encompasses “multidimensional concepts” such as scalars, vectors, and matrices in fields like physics, mathematics, and deep learning.

The Tensor team is the only one in the crypto industry to have released two groundbreaking consumer applications back-to-back, boldly challenging a market more than 1,000 times larger than that of NFT marketplaces. As a result, Vector was born, achieving an annualized trading volume of $9 billion within just three months. Its Total Addressable Market (TAM) is estimated to be worth several billion dollars per year.

Despite being a small team, Tensor has swiftly established itself among entrenched competitors, repeatedly proving its capacity to lead the industry. This is largely due to the team’s deep understanding of assets and keen market insight, coupled with its commitment to continuously devising the best possible solutions that deliver “greater utility to more people.” They rapidly bring these solutions to life through outstanding technical prowess and innovative ideas.

Moreover, Tensor’s products not only raise the bar for industry standards step by step, but they also establish a sustainable, incentive-driven flywheel that extends beyond one-off events, thereby maintaining a robust ecosystem. Now, Tensor is leveraging TNSR at the core of its application ecosystem to interlink its products organically, align incentives across the entire community, and envision a more holistic future in which all members of the Tensor ecosystem grow and benefit together.

The Tensor NFT Marketplace and Vector collectively generate annual platform revenues already in the tens of millions of dollars, half of which flows into a treasury composed of TNSR holders. This naturally fosters anticipation for an increase in TNSR’s value as well as for greater overall utility among ecosystem participants.

True to its name, Tensor will continue to explore new dimensions of innovation, propelling itself toward an even more powerful Tensor in the future.