Building Solana's Next Breakout App | Ilja Moisejevs and Richard Wu

The Rise of Vector: Tensor's Pivot to Social Meme Coin Trading

In the fast-paced world of cryptocurrency, adaptability is key to success. This principle is exemplified by the story of Tensor, a Solana-native NFT platform that has recently made a bold pivot into the realm of meme coin trading with their new app, Vector. In a recent episode of the Lightspeed podcast, hosts Jack Cubannek sat down with Ilja Moisejevs and Richard Wu, the co-founders of Tensor, to discuss this strategic shift and the future of social trading in the crypto space.

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What is Vector?

Vector is a social meme coin trading platform built on Solana. It combines elements of Reddit, TikTok, and traditional trading platforms to create a unique experience for crypto enthusiasts. The app allows users to share trades, follow other traders, and engage in a community-driven approach to meme coin speculation.

The genesis of Vector came from Tensor's recognition of changing market dynamics. As Ilja Moisejevs explained, "About a year ago, we felt the NFT market was slowing down, and we just felt that the market wasn't large enough to support the kind of company we wanted to build." This realization led to the development of Vector, which capitalizes on the growing trend of meme coins and social trading.

The Thesis Behind Vector

The core thesis behind Vector remains consistent with Tensor's original vision for compressed NFTs. As Richard Wu elaborated, "The thesis is that there's just this explosion of assets on chain, and they're done on the chain that's really cheap, and they have to move around a lot faster than what it was thought of before." This insight led to the creation of a platform that could handle the rapid movement and trading of these new, attention-driven assets.

Vector's focus on meme coins is strategic. Meme coins represent a larger market than NFTs, with the potential for higher trading volumes and more frequent transactions. As Ilja pointed out, "We know that meme coins are a 100X bigger market than NFTs." This market size allows for the creation of a more consistent and simple product that can attract a larger user base.

Social Trading: The Key Differentiator

What sets Vector apart from other trading platforms is its emphasis on social features. Richard Wu explained the rationale behind this approach: "We very quickly converged on not just a mobile product, but a mobile social product. Because by definition, meme coins are an asset that's traded purely based on attention. And the most important signal when you're trading an asset like that is actually what do other people think?"

This social aspect isn't just a feature; it's a core part of Vector's value proposition. By allowing users to share trades and follow others, Vector creates a network effect that can be difficult for competitors to replicate. As Richard noted, "Once you reach critical mass, which I think we're getting there, like we have about 20,000 daily active users now... It's going to be hard for someone who decides to come in late into the trend and say, hey, we're going to build a meme coin platform, and we're going to try to take away your users."

Vector's Early Success

The success of Vector has been impressive, even in its early stages. Ilja shared some remarkable statistics: "When meme point volumes are high, for example, when Trump launched a token and then subsequently Melania, our volumes went through the roof. We were doing about $25 million a day or $9 billion annualized." Even on slower days, Vector maintains significant volume, with Ilja noting, "Right now it's hovering between probably like $6 to $10 million on a low day, maybe $10 to $15 on a good day."

These volumes translate into substantial revenue for Vector, which takes a 0.01% fee on trades. This fee structure has already resulted in Vector generating 10 times the annualized revenue of Tensor's NFT marketplace, highlighting the potential of the meme coin market.

The Meme Coin Phenomenon

The rise of meme coins has been a contentious topic in the crypto world, but Vector's founders see it as a natural evolution of the market. Richard Wu pointed out the recent legitimization of meme coins: "I think basically the cat's out of the bag, I think given that the president of the United States of all people launched a meme coin and basically said, hey, it's okay for us to, for people to just launch a meme coin, create essentially this memetic thing that people can speculate on."

This normalization of meme coins has opened up new opportunities for platforms like Vector. As Richard explained, "We expect these volumes to go up in the next couple of months and to really hit its peak, its stride later on this year."

Addressing Technical Challenges

Building a platform for trading volatile assets like meme coins comes with its own set of technical challenges. One of the main issues is protecting users from MEV (Miner Extractable Value) and ensuring fair pricing. Richard Wu detailed their approach: "We use both Jito plus a couple of other services like temporal and blocks route, who all have a whitelist of validators that are not sandwiching the users. And this is our way to protect our users from getting screwed over."

This technical sophistication is a key differentiator for Vector, leveraging the team's experience from building the Tensor NFT marketplace. As Richard noted, "We've basically been doing this for the NFT marketplace for the past... two and a half years before working on Vector. And we just know like all the tricks in the book."

The Future of NFTs

While Tensor has pivoted towards meme coins with Vector, the team hasn't abandoned their roots in NFTs. Ilja Moisejevs shared his perspective on the future of NFTs: "I think NFTs are gonna come back, but not in the form factor that they existed before." He envisions a future where NFTs are ubiquitous but less noticeable, similar to how we think about websites today.

The challenge, as Ilja sees it, is building a consistent and simple product for such a diverse asset class. This difficulty in creating a unified experience for NFTs was part of the motivation for the pivot to Vector, which focuses on the more homogeneous meme coin market.

Building a Consumer Platform in Crypto

One of the most insightful parts of the discussion revolved around the challenges of building consumer platforms in the crypto space. Ilja emphasized the importance of intuition in this process: "I think building consumer companies is both in large than a science. I mean, building any companies in large than a science, but I think with consumer in particular, I feel intuition has an overly large role to play."

This intuition comes into play when interpreting user feedback. Ilja gave an example: "A lot of traders are asking for automated trading. They come to you and they say, hey, can I just have this bottom that copy trades somebody? If you take that to face value, you're going to build a really bad product because that's not actually what they're asking for." Instead, the team focuses on understanding the underlying needs and desires of their users, even when those needs aren't explicitly stated.

The Role of Entertainment in Crypto Trading

An interesting perspective shared by the founders is the idea of crypto trading, particularly meme coin trading, as a form of entertainment. Richard Wu explained, "Vector is not about community building to be clear. Vector is a game. And the number one thing you want from a game is high frequency." This approach frames the volatility and short-lived nature of many meme coins not as a bug, but as a feature that keeps users engaged and entertained.

This entertainment factor is crucial for user retention, especially given the reality that not all users will profit from trading. As Richard pointed out, "You can almost think of social as value that's being created based on interactions between people." This social value, along with the entertainment aspect, can keep users engaged even if they're not consistently profiting from their trades.

The Tensor Token and Treasury

A significant development for Tensor and Vector is the adoption of the Tensor token (TNSR) and the establishment of a Treasury. Ilja explained the decision: "We felt it was the right thing to do to go back to the existing token holders and take care of them rather than launch second, third, fourth token." This approach aligns Vector with the broader Tensor ecosystem and provides a unified value accrual mechanism.

The Treasury, which receives 50% of Vector's revenue, is positioned as a unique entity in the crypto space. As Ilja described it, "This is the only Treasury in crypto that is an index on all kinds of long tail assets, including NFTs and fungible assets like memes." This structure provides an interesting investment opportunity for those looking to gain exposure to the broader crypto market without picking individual assets.

Lessons for Founders

Reflecting on their journey, the Tensor founders shared valuable insights for other entrepreneurs in the space. Ilja emphasized the importance of market size: "The biggest thing to watch out for is really market size. I think when you're choosing a market to operate on, you really wanna be thinking about how big this market can become."

However, they also stressed the importance of adaptability. As Richard noted, "We admitted a year ago that we made a mistake and we took the company in a different direction and we'll do it five times again if we have to, like we don't care." This willingness to pivot and adapt to market conditions has been crucial to Tensor's success.

The Vision of Internet Capital Markets

The conversation touched on Solana's vision of "internet capital markets," the idea that all assets will eventually be traded on-chain. Both Ilja and Richard expressed strong belief in this future. Ilja stated, "I mean, I think it's a no-brainer to anybody in the industry that the future of capital markets is online. It's just so obvious."

They see Vector playing a significant role in this future. As Ilja put it, "If we're right about our thesis, then Vector is going to be the way a billion people experience these types of assets." This ambitious vision positions Vector not just as a meme coin trading platform, but as a potential gateway to the future of finance.

The Road Ahead for Vector

Looking to the future, the Tensor team sees significant room for growth and improvement in Vector. Richard Wu commented, "I think basically vector right now has probably reached about 10% of its potential." The team is focused on refining the platform, exploring different monetization models, and enhancing the user experience for traders.

Their ultimate goal is to make Vector the go-to platform for traders looking to build a following in the crypto space. As Richard explained, "Ideally in two years from now, you as the trader starting in the space wanting to build a follower can't imagine doing it on any other platform, other than vector."

Conclusion: A Bold Vision for the Future of Crypto Trading

The story of Tensor and Vector is a testament to the dynamic nature of the crypto industry. By pivoting from NFTs to meme coins and embracing social trading, Ilja Moisejevs and Richard Wu have positioned their company at the forefront of an emerging trend in digital asset trading.

Vector's early success and the team's clear vision for the future suggest that we may be witnessing the birth of a significant player in the crypto space. As the industry continues to evolve, platforms like Vector that can adapt to changing market conditions and user preferences are likely to thrive.

The integration of social features into trading, the focus on mobile-first experiences, and the embrace of emerging asset classes like meme coins all point to a future where crypto trading is more accessible, engaging, and perhaps even entertaining for a broader audience. As we move towards the vision of internet capital markets, Vector and platforms like it may well play a crucial role in shaping how millions of people interact with digital assets.

While challenges remain, particularly in balancing user protection with the inherent volatility of meme coins, the Tensor team's approach of continuous iteration and close attention to user needs positions them well for the future. As the crypto industry continues to mature, it will be fascinating to watch how Vector evolves and whether it can truly become the gateway for a billion people to experience the new world of digital assets.

Facts + Figures

• Vector, a social meme coin trading platform, was launched by the founders of Tensor, a Solana-native NFT marketplace.
• Vector has reached about 20,000 daily active users and is doubling every two weeks.
• At its peak, Vector was processing about $25 million in daily trading volume, or $9 billion annualized.
• Vector's current daily trading volume ranges from $6-10 million on low days to $10-15 million on good days.
• Vector takes a 0.01% fee on trades, which has resulted in 10 times the annualized revenue of Tensor's NFT marketplace.
• The Tensor token (TNSR) is now integrated with Vector, with 50% of Vector's revenue going to the Tensor Treasury.
• The Tensor Treasury is positioned as the only treasury in crypto that indexes long-tail assets, including NFTs and meme coins.
• Vector's founders believe the meme coin market is 100 times larger than the NFT market.
• The team uses services like Jito, temporal, and blocks route to protect users from MEV (Miner Extractable Value) attacks.
• Vector is currently estimated to be at about 10% of its potential, according to its founders.
• The founders predict that in 30-50 years, there may be a greater dollar value of assets minted natively on-chain than exist in the traditional financial world.

Questions Answered

What is Vector?

Vector is a social meme coin trading platform built on Solana. It combines elements of social media platforms like Reddit and TikTok with traditional trading functionalities, allowing users to share trades, follow other traders, and engage in community-driven meme coin speculation. The platform aims to capitalize on the growing trend of attention-driven assets in the crypto space.

Why did Tensor pivot from NFTs to meme coins?

Tensor pivoted from NFTs to meme coins due to changing market conditions. The founders observed that the NFT market was slowing down and wasn't large enough to support the kind of company they wanted to build. They recognized that the meme coin market was significantly larger (estimated to be 100 times bigger) and offered more frequent trading opportunities, which aligned better with their goal of building a high-volume, consumer-friendly trading platform.

How does Vector protect users from MEV attacks?

Vector protects users from MEV (Miner Extractable Value) attacks by using a combination of services and strategies. They utilize Jito, temporal, and blocks route, which provide whitelists of validators that do not engage in sandwiching (a type of MEV attack). By routing transactions through these trusted validators, Vector aims to ensure fair pricing and protect users from being exploited by malicious actors in the network.

What role does the Tensor token (TNSR) play in the Vector ecosystem?

The Tensor token (TNSR) has been integrated into the Vector ecosystem as a unifying element. Instead of launching a new token for Vector, the team decided to accrue value back to the existing TNSR token. Fifty percent of Vector's revenue goes to the Tensor Treasury, which is controlled by TNSR token holders. This structure positions the TNSR token as an index on long-tail assets, including both NFTs and meme coins, providing a unique investment opportunity in the crypto space.

How does Vector approach the social aspect of trading?

Vector emphasizes the social aspect of trading by allowing users to share their trades and follow other traders. This approach is based on the understanding that for attention-driven assets like meme coins, the most important signal is often what other people think. By integrating social features, Vector aims to create a network effect that enhances user engagement and provides valuable insights for traders. The platform treats meme coin trading almost like a game, focusing on high-frequency interactions to keep users entertained and engaged.

What lessons did the Tensor founders learn from their pivot to Vector?

The main lesson the Tensor founders learned from their pivot to Vector was the importance of market size and adaptability. They emphasized the need to carefully consider the potential size of the market when choosing where to operate. Additionally, they learned the value of staying intellectually honest and being willing to admit mistakes and change direction when necessary. The founders stress the importance of having a long-term vision while remaining flexible enough to adjust to market conditions and user needs.

What is the vision for Vector's future?

The vision for Vector's future is to become the primary platform for crypto traders looking to build a following and share insights. The founders estimate that Vector is currently at about 10% of its potential and see significant room for growth. Their goal is to refine the platform, explore different monetization models, and enhance the user experience to the point where, within two years, aspiring crypto traders wouldn't consider using any other platform to build their following. Ultimately, they envision Vector as the way a billion people will experience trading attention-driven assets in the future of internet capital markets.