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Heat oil in Instant Pot on the Sauté setting. Add onions and sliced fennel; season with a big pinch of kosher salt. Cook, stirring occasionally, until vegetables start to soften and sweat, about 2 minutes. Add paprika, fennel seeds, and cayenne (if using) and stir to coat vegetables with spices. Set lid on pot askew and continue to cook, stirring occasionally and reducing heat if needed, until vegetables are very soft but have not taken on color, 10–12 minutes. Add tomatoes, crushing them with your hands as you go, then use 1 cup water to rinse out cans and add to pot; season with kosher salt and pepper. Seal lid and cook on high pressure for 12 minutes.
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