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I'm making an animated short in AE using some basic rounded rectangles as characters. There are 2 characters, a red rectangle and a blue rectangle. I am now not able to decide whether to draw and animate the characters in the main comp itself or animate them in 2 separate comps and nest them in the main.

Which one of these 2 is a better approach and why?

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I would advise doing them separately in order to keep the project tidy and organized. This is one way of doing it.

I rig characters in AE using DUIK, and after I finish the process there are a dozen layers containing controllers and null objects etc. It can be daunting and difficult to navigate through layers if you don't put them separately. On the other hand, it can be annoying to switch through comps all the time.

A different approach would be to keep all characters in one comp and:

  1. Use the shy guy on the layers you don't need in order to get rid of clutter.
  2. Make sure that each character's layers and their controllers,null etc. have the same label color. A visual aid will help avoid confusion :)
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The best rule of thumb is to pre-compose as much as needed. Not only does this keep the file tidy, but you're then able to recycle those compositions when you need to, though this depends on the complexity of the animation.

In your instance, it sounds like you have 4 elements in the composition, and should be able to keep a grasp on them. This will allow you to quickly make edits without having to dig deeper into the other compositions each time.

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