You listed the functions, but the question was not about that. As a merchant you don't need ico, smart payments, insuranse, betting and other. You need only add payment button on your site and spend money from sales. That's all. Why Obyte button is better than Visa or ETH button? Why as a merchant i will prefer Obyte over ETH?
There is only one reason - the size of the community aka spenders. If i see that my customers want Obyte, i will add Obyte. There is no difference will on the button logo btc, eth or visa. Merchants want to sell their goods and they don't get a fuck about textcoins.
Why limit yourself to just payments, even PayPal doesn't do just payments, it can do recurring payments too. If you are interesting in just payments then there are lot more options out there. Even new OpenBanking/PSD2 API for banks is able to do just payments, so all cryptocurrencies that do just payments are quite hard to sell in very near future.
There is no need to be ultra illegal or ultra legal. Both markets are open and it would be great to be accepted on both. But both legal and illegal markets completely ignore Obyte.
The only target group for crypto currencies is the unregulated market. A decentralized solution is urgently needed there. And only on this market there is a serious demand for cryptos, because it only makes sense there.
The masses are not interested in cryptos. It will only deal with cryptos because of the increasingly attractive unregulated markets.
You still living in 2013 when Silk Road was booming. What is increasing is number of people who want to smoke weed, not hard drugs. And weed is becoming more legal in more states. Bitcoin was used back then and there are many-many more options today (including blackbytes), but it is still as private as good as is your opsec in general. So, amount of people who are suddenly able to do it without getting caught is not increasing as fast as you claim. It is still a niche market compared to all the legal options out there and in most cases, if weed becomes legal in most states, all you need is just privacy.