We’ve seen NFTs in gaming, virtual avatars, virtual art, and art galleries, and now, thanks to a top U.S. wealth management firm and insurance broker, virtual insurance will soon be coming to the metaverse.
IMA Financial Group has announced its plans to enter the metaverse, offering NFT insurance. As an integrated financial services company, IMA Financial Group focuses on client asset protection through insurance and wealth management solutions. It will expand its services into the metaverse through Decentraland, a leading 3D virtual world built on blockchain.
Senior VP of Marketing at IMA Justin Jacobs shared the firm’s reasons for the move. He described the rapid and promising development of the multibillion-dollar NFT market.
“With the explosion in the NFT market and great advances in the use of blockchain technology, we believe our clients are in the metaverse or exploring the opportunities, said Jacobs. “We want to be ready to solve risk and insurance concerns that may come up.”
About the Project
IMA’s new Decentraland project is Web3Labs, named after the term Web3 or 3.0, the next phase of the worldwide web, defined by decentralization and blockchain.
With this project, IMA plans to explore opportunities along the metaverse value chain, advising clients interested in crypto and decentralized finance, or DeFi. In addition, it aims to “manage risk and develop insurance solutions that protect assets.”
IMA’s Web3Labs will have both interactive content and several newly-minted NFTs.
Ultimately, its goal is to create an environment that could host NFT insurance transactions. In the meantime, Web3Labs aims to learn more about the risks of meta assets while enmeshed within the metaverse rather than taking a “wait and see” approach.
IMA chose to partner with Decentraland because of its strong potential for growth and positive user experience. As one of the major names in the metaverse, Decentraland has the first-mover advantage and offers users an array of functionalities. IMA also plans to target the top U.S. bitcoin mining companies, which make up the top 30% of the American hash rate.
Blockchain-focused companies are thrilled to see this initiative by established companies. Co-founder of blockchain game Alien Worlds Sarojini McKenna said that IMA’s recent move is evidence of the growing mainstream interest in crypto.
She also spoke about the importance of growing layers of the metaverse, such as NFT insurance:
“NFT fraud and scams have been making headlines, and these issues ultimately undermine the long-term viability of this digital asset class. To people outside of the crypto space, NFTs may feel like a precarious investment for a variety of reasons. By assessing risk and providing insurance on these assets, IMA Financial Group is filling a gap in the market and promoting consumer confidence, which is something the industry desperately needs at this point in time.”
NFT Growth Shows Little Signs of Stopping
While other crypto markets tumbled earlier this year, NFTs have only continued their strong 2021 momentum. Data from The Block shows that global sales reached a record of $7.3 billion in January. This trend comes after 2021’s explosive year for NFTs. According to a recent report from market tracker DappRadar, the NFT market generated over $25.5 billion in trades in 2021.
Some experts believe that this is only the beginning as NFTs continue to grow in utility. In an interview, co-founder of BLOCKv Reeve Collins said that NFTs would become an everyday part of life, from car insurance to deeds.
“As you can imagine, a huge amount of value will be stored in these assets and, thus, it will be critical that those who partake in forthcoming metaverse worlds protect those assets,” said Collins said.
“So it’s only natural that we are seeing the beginnings of insurance products preparing for protecting the wealth that will be vested in Decentraland and other digital systems. It’s exciting that we are seeing all sorts of industries trying to get involved in the metaverse, such as JPMorgan opening up a virtual location for their bank, and it’s clear the insurance industry will have a big role to play.”
Mainstream Institutional Interest in Crypto Is on the Rise
This step by IMA is the latest in a long line of institutional firms making their first forays into cryptocurrency. Two years ago, firms like IMA didn’t want much to do with crypto, but now, corporate giants are pouring big bucks into the industry and embracing the wave of crypto interest.
For example, in mid-February, JP Morgan Chase set up the metaverse’s first bank. JP Morgan explained its take on early investments in the metaverse and how its value may evolve in the future.
“Supply and demand dynamics are driving people into the meta-economy. Over time, the market for metaverse real estate could evolve in a similar way as the real estate market in the analog world. In time, the virtual real estate market could start seeing services much like in the physical world, including credit, mortgages, and rental agreements.”
Big names like Credit Suisse have begun investing in in-house crypto capacity by hiring crypto analysts. Firms such as Charles Schwab and Blackrock have invested in crypto exchange-traded funds or ETFs. Meanwhile, companies like Tesla announced have billions in crypto holdings.
At this rate, the metaverse will soon have all the business accoutrements of the physical world. From virtual banks to digital asset insurance, the only question is: what’s coming next?
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Amanda is a professional writer who is passionate about helping people share their vision with more audiences using SEO, data, and storytelling. She often writes about cryptocurrency, fintech, politics, and the law. Her background is in policy and research, with a degree from NYU and certifications from Harvard, Google, and more. When not writing, Amanda enjoys painting, dancing, and playing chess.