Singapore’s government-owned investment firm, Temasek, is continuing to invest in cryptocurrency projects despite losing hundreds of millions of dollars in the collapsed FTX crypto exchange. The firm has recently invested $10 million in Array, a developer of an algorithmic currency system based on smart contracts and artificial intelligence.
The recent investment is part of Array’s second funding round, which is believed to bring the firm’s valuation to over $100 million. The new algorithmic currency system supported by Temasek is aimed at providing a more stable, efficient, and scalable asset than traditional cryptocurrencies like Bitcoin (BTC). Array’s system is expected to have a variety of use cases, including payments, remittances, and investments.
Array’s smart contract platform, ArrayFi, has been designed to enable decentralized applications built on top of its network and driven by its proprietary AI algorithm, ArrayGo. This algorithm operates independently, without any human or institutional control, and is triggered solely by market actions. According to the company’s blog post, ArrayGo is based on the bonding curve smart contract, which has been implemented manually to ensure the value of the token remains stable and predictable for investors and traders indefinitely. The bonding curve is integrated into a smart contract that governs the issuance and trading of Array’s native token, Ara (ARA).
During Array’s first Twitter Space conducted in February, the company explained that the bounding curve mathematics aims to protect Array users from “pump and dump” schemes.
Temasek’s decision to invest in Array comes several months after the Singapore government openly admitted that the company suffered reputational damage from investing in the collapsed crypto exchange FTX. In November 2022, Singapore’s Deputy Prime Minister Lawrence Wong argued that Temasek suffered more than just financial losses due to investing in FTX.
Temasek, which is fully owned by the Ministry of Finance but operates independently, was forced to write down its entire $275 million FTX investment. This amount accounted for only 0.09% of Temasek’s $403 billion portfolio as of March 2022.
Aside from the Array investment, Temasek also participated in a $10 million series A round for the United States-based impact-verification and intelligence firm BlueMark in April.
Temasek’s ongoing investments in cryptocurrency projects signal that the firm remains optimistic about the potential for blockchain technology and digital assets to revolutionize various industries. The same can be said for several other major institutional investors around the world, as crypto and blockchain investments continue to gain mainstream recognition and legitimacy.
However, it is crucial for both investors and regulators to remain vigilant about potential risks and downsides associated with such investments, as highlighted by Temasek’s experience with FTX. When exploring these emerging technologies, investors should ensure that they are well-informed about the projects they invest in, while regulators should work to develop well-balanced policies that enable innovation without compromising consumer protection.
In conclusion, Temasek’s investment in Array indicates that the Singaporean investment firm still believes in the promise of digital assets and blockchain technology, despite its previous setbacks with the FTX crypto exchange. Array’s innovative smart contract and AI-based algorithmic currency system could potentially transform various sectors, such as payments, remittances, and investments. Moving forward, investors and regulators alike must be cautious while navigating this rapidly-evolving landscape to mitigate risks while still allowing innovation to thrive.
