Cold winter months are often associated with hibernation and laying the groundwork for a warm, blossoming spring. As the cryto bear market continues, so too do iterations and innovations in blockchain, with founders and builders using the time to be ready for the eventual upward shift in the market.

For web3 consultant Rebecca Kontosic—who’s also the founder of L.O.T.L., a venture capitalist at Dark Capital and the marketing manager for Bitget in Canada—it’s a time for pursuing the company founders who are thinking and building in unique ways.

“Right now, given the market, we see a lot of people with their heads down building, which is really the coolest time to be finding projects,” Kontosic said to me in a recent conversation. “There are a lot of gems, and because it’s a bit quieter in the market given the bear, it gives them the opportunity to really focus on building something quite exceptional.”

On the creative side, Kontosic is launching a phygital project with Smiley brand—the 90s smiley face—which is an AR-linked book with journaling and self-help prompts. Previously, she helped launch the Superlotl nonfungible token (NFT) project for Inkbox, the maker of temporary tattoos.

She also leads marketing in Canada for Biget, one of the largest cryptocurrency exchanges. “The worlds are definitely very separate,” she said. “There's the nine-to-five, the passion project, and the raising of funds.”

Through Dark Capital, Kontosic and her teammates helped raise over $52 million. The majority of the funds were directed to mostly male teams—an area of the business Kontosic wants to change moving forward.

“I’m trying to actively find more powerful women in the space—more female founders and more female led teams—because on our end, we haven’t had the opportunity to come across really talented women who are raising,” Kontosic said. “I want to get more into those conversations.”

Dark Capital’s personnel come from Mark Cuban’s web3 team, so they possess an exhaustive list of VC relationships and networks.

The purple avatar of power

“Right now, we’re launching an exclusive Telegram group for top-tier VCs within web3 to share deal flow and to get more exposure into deals,” Kontosic said. “We’re looking for people who are changing the way blockchain is working. Whether it’s a revolutionary AR (augmented reality) company, gaming, NFTs, SocialFi or DeFi platforms—if it’s cool, we want to fund it.”

Kontosic creative-centric work has focused on bringing physical brands into the digital space.

“My NFTs were originally by Bic, the company known for its pens and lighters,” Kontosic said. “Through its subsidiary, InkBox, it’s now the largest tattoo company in the world, and they wanted to make an NFT collection to represent that.”

Each NFT is a unique tattoo, all of which are sold on the InkBox website.

“It was a good way to bridge an IRL product with a digital use case and get tattoos in a new way that we haven’t seen before,” Kontosic said. “It’s almost a handshake agreement in tattooing, where everybody just agrees they’re not going to copy and it’s always going to be 30% unique. But there’s nothing to back that up and obviously, a lot of times, people get ripped off or they just copy art unknowingly. There’s a lot of opportunities that exist within blockchain [in terms of authenticity], so I was excited to work within the tattoo industry for that, too.”

A lack of regulatory certainty is holding back innovation, she said. 

“I see it with a lot of other web2 companies I’ve been working with—we have cool ideas and want to do exciting things—but it’s challenging when the Securities Exchange Commission doesn’t make up their mind definitely enough to be able to explain what the rules are.”

The SEC can be a major hurdle for collections like Bic’s when the legal landscape is changing every six months. Companies could start down a path based on the current set of laws—only for those laws to change half a year later—and now what they were working on potentially has to be revised from scratch or even shelved.

Read our newsletter: The Jamie Dimon Crypto Shuffle I Fake News, But From The SEC, And The Grand Finale

“It’s definitely been the biggest hurdle for me,” Kontosic said. “When I originally looked at these massive brands entering web3, I thought there were so many crazy things they could be doing and couldn’t understand why they weren’t doing them. It seemed like every single company entering web3 had the same boring utility and the same roadmap. It was cookie-cutter. Once I started to build for a big web2 company, I realized those cookie-cutter things were the things companies were comfortably allowed to do. It deters a lot of creativity and I think it stops the space from moving forward in ways that it could, but it’s also the growing pains of crypto still being a wild-wild-west of an industry right now.”

The legal ramifications help explain why certain web3 innovations and decisions aren’t able to be made by larger, more-traditional web2 companies.

“Even the people passing new laws or deciding from the government standpoint—you can only expect them to have so much knowledge and background in the web3 space as well,” Kontosic said.

It’s why for Kontosic, the future of web3 and crypto is bubbling with brightness—an industry currently undergoing a bear market metamorphosis—which she expects will bear fruit the latter half of this year and into 2025.

“Blockchain, web3, and crypto aren’t just flashy keywords anymore, and at least we’re starting to get respect and acknowledgement in that regard—meaning, there really is no choice but to bring in rules and regulations behind it,” Kontosic said. “Without laws, you’re basically pushing people to take their business outside Canada and the U.S. and go to places where crypto is more accepted, like Dubai or the British Virgin Islands. You’re almost losing economic value at that point.”

It’s hard for large companies to make the effort to enter the web3 space with such uncertainty about, she said. 

“They’re now almost doing it in a discreet way. Starbucks has their entire Odyssey loyalty program—which is essentially an NFT collection—but it’s not marketed that way. It’s really just focused on loyalty. I’m excited to see more of that—using blockchain in ways we never have to hear the word ‘blockchain.’ No one needs to understand how it works, they just need to understand if something is cool, brings value to their life, and if they want to use it.”

Perhaps the future of web3 and cryptocurrency is really more about the practical use of the technology and how people benefit from it, rather than the intricacies beneath the hood.

“It reminds me a lot of the early 2000s and the dot-com bubble,” Kontosic said. “Whoever is the new tech kid on the block always gets bullied until their own value is realized.”

*—Source correction: Removes all references to a project that wasn’t meant to be discussed 2/8/24