Richard Wu, Co-founder - Tensor

Our guest this week is Richard Wu, Co-Founder of Tensor, a Solana-based NFT marketplace tailored for professional traders. We explore the origins and journey of Tensor on Solana, and delve into the unique capabilities of their recently launched compressed NFT marketplace. Richard shares insights on the differences between traditional NFTs and Tensor's compressed NFTs, and discusses the innovative trading functionalities and community strategies in place at Tensor. We also touch on Tensor's rewards system, their upcoming NFT collection, and their strategic partnership with Metaplex. 

Show Notes:

00:54 - Starting on Solana

03:37 - From Solana to Tensor

08:17 - Solana hackathons

10:16 - Only possible on Solana        

12:16 - Compressed NFTs and User Experience at Tensor

15:06 - Insights on Compressed NFTs vs. NFTs

17:08 - Tensor’s trading functionalities

20:47 - Tensor’s strategy for the community                              

23:03 - NFT collection

24:35 - The point system

25:29 - The Solana ecosystem / Being a leader in the NFT marketplace

27:13 - Partnership with Metaplex

28:33 - A builder he admires in the Solana ecosystem? 

Full Transcript:

Brian Friel (00:00):

Hey everyone and welcome to The Zeitgeist. The show where we highlight the founders, developers, and designers who are pushing the web 3.0 space forward. I'm Brian Friel, developer relations at Phantom. I'm super excited to introduce our guest, Richard Wu, the co-founder of Tensor. Tensor is the premier NFT marketplace for pro traders on Solana. Richard, welcome to the show.

Richard Wu (00:28):

Thanks for having me on, Brian. Great to be here.

Brian Friel (00:31):

I'm super excited to chat with you today. We got a lot to go into. Obviously you guys are extremely popular recently on Solana, but I think you guys have a really interesting story to tell. Going back to some of your earliest days, you and your co-founder, I remember you guys multiple times either placing highly or winning some of the Solana hackathons. Can you take us back to those early days of how you guys both got started on Solana?

Richard Wu (00:54):

Yeah, of course. Just to give some backstory maybe on myself and on Ilja, so I think not a lot of people know this, but we were both essentially strangers right before we started Tensor. And so we basically met through this co-founding matching portal online, YC Startup School. And that was sort of our first connection. We hadn't worked together before. We basically had no interactions outside of that. So one of the first things we did initially was we basically got on a call, exchanged a bunch of notes on what ideas he wanted to work on, what interests us. And for Ilja specifically, he had been building on Solana for quite some time. I was actually not familiar at all with Solana nor like crypto development in general. And so he sort of red pilled me into giving it a shot. And so our first project that we actually worked together was a hackathon project. That was sort of our NFT pricing oracle that at the time made a lot of sense.

(01:51):

So essentially what an NFT pricing oracle does is it provides price information about NFT collections so that other NFT protocols can actually consume these prices in order to do certain functions. So you can imagine a lending protocol that follows a pool based model would need some price to perform liquidations or for people to... I guess mainly for liquidations.

(02:13):

And NFT Perps, for example, is another type of protocol that would require pricing information on chain. And so that was initially the project that we worked on together. We submitted that to the Solana Riptide hackathon I believe, which I don't know if it was the second or third ever Solana hackathon, but we were pretty early on in the hackathon cycle. We just submitted our project to that hackathon because one, we wanted to win a bit of money so that we can bootstrap ourselves further in the process. And two, we just thought it would be fun to submit something. We ended up placing third in the DeFi category, which was pretty cool and the rest is sort of history.

Brian Friel (02:53):

That's awesome. And so you're famous on Twitter I would say, for being this David versus Goliath set up because you guys have gone from these two devs who just code all day submitting the hackathons to today Tensor is always up there with Magic Eden in people's minds as leading marketplaces, not just in Solana but say in NFTs across crypto. And a lot of people don't know that most of that is really built off the backs of everything that you and your co-founder have built. And starting back to those early days where you guys were just in hackathons chewing glass, so to speak, walk us through that journey. How did you guys go from that initial Solana Riptide hackathon project idea to getting the idea for Tensor, deciding this is something you actually want to build and then sticking it out and then getting product market fit like this?

Richard Wu (03:37):

I would say for us, the biggest strengths that we had as a two person team for the longest time was that we could really spend a lot of our time as founders talking to customers and understanding what their pain points are when it comes to NFT trading. So the initial idea of building an NFT trading product or platform was because Ilja and I, when we were building the NFT oracle, we were both trading NFTs on the side just to understand the market a bit more, try to understand why people are trading NFTs to begin with. And we had sort of this aha moment where I think at the time Okay Bears was minting and it was one of the hottest, if not the hottest, mint of 2022 on Solana. And we went on Magic Eden and we went on Hyperspace and we went on a bunch of other sites and we tried to buy Okay Bears, or at least I tried to buy Okay Bears, right after the mint and it was basically impossible for me to get a transaction through.

(04:32):

And I think the biggest issue then was these marketplaces weren't showing listing data fast enough and that was a huge issue for a lot of these new mints that happened after Okay Bears. There was Tripin Apes, which is also a really hot one. There was a slew of other really hyped collections that sort of faded into existence now. But it was just really difficult for me as a human trader, like NFT trader, to actually put any trades through. And that was sort of the inkling that motivated us to build something better. When we thought about our experience using trading platforms like Binance, like Buy Bit, Coinbase, we were very familiar with the idea of real time data and that speed matters a lot if you're trading in and out really quickly. That was the motivation to bring sort of the Coinbase, the centralized exchange experience, at least the speed, of it to NFT trading.

Brian Friel (05:25):

Yeah. For sure. And I've heard this from you guys before, but some of your thesis around why traders would want that because at the time, going back to those days when there was the Okay Bears hot mint, you mentioned Magic Eden being basically the only game in town to go and see these. I'd say the paradigm around NFT trading was very much you go to a site and you see a picture you like and you click buy and the model that Tensor and you guys have introduced and others like Blur have helped pioneer as well is very much spinning that on its head and making it, I'd say, less about, or maybe potentially less about, the characteristic [inaudible 00:05:59] much more around this pro trading like style interface. What were some of the insights that led you guys to believe  that that was something worth betting on? Because it was very much a contrarian take at the time.

Richard Wu (06:09):

Yep, absolutely. I think at the time when we were trying to fundraise, actually... This was actually during the whole FTX collapse and Solana going to 10 bucks, but a lot of the VCs that we talked to were questioning, "Why would you build a product that is already somewhat niche like NFTs and sort of the grand scheme of crypto for an even more niche group of users?" I think one thing that we saw and we knew just from our experience in sort of TradFi as well as trading fungible tokens was that we knew that with all things trading, it follows this sort of parallel dynamic where the top, let's say, 20% of traders account for 80% of volume for any given market. That's a rough approximation. So the 80/20 rule applies here where most traders are probably not trading in size, but the ones that do are few and far between, but they want something that's more advanced, that's more catered to their style of trading that many other traders might not care for.

(07:11):

We ourselves weren't exactly that for NFT trading, but we knew a lot of people in the ecosystem who did trade NFTs in the hundreds at a time. And the whole NFT sweeping thing is kind of obvious in hindsight now, but at the time there were very few marketplaces that actually had the sweep feature and we made that one of the first features to implement, was being able to bulk sweep, being able to bulk list, being able to bulk de-list. All of that obviously is table stakes now for any marketplace, but at the time we were the only aggregator/marketplace to do it.

Brian Friel (07:44):

So you mentioned the fundraising journey there a little bit. I want to hit on that just a little bit too because you guys recently announced that you closed your first round with placeholder leading as well as a large group of angels, many of which I would say are Solana power users and probably po