# Evaluating Campaigns

## A Due Diligence Framework for Entertainment IP Tokens

Not all entertainment tokens are equal. This guide provides a systematic framework for evaluating campaigns before investing.

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## The Five Pillars

### 1. Team & Track Record

**Questions to Ask**:
- Has the producer/director completed projects before?
- Do they have IMDb credits, festival selections, or distribution history?
- Is the team credited on recognizable work?
- Have they managed budgets of this size successfully?

**Red Flags**:
- No verifiable film/TV credits
- No team photos, bios, or social presence
- Vague claims like "Hollywood veterans" without names
- Budget seems wildly misaligned with project scope

**Green Flags**:
- Previous projects with festival placements
- Named actors or crew attached
- Transparent budget breakdown with realistic line items
- Active, engaged social media presence

### 2. Budget Realism

**The Floor Test**:
The Floor is the minimum funding required. Ask: *Can this film actually be made for this amount?*

| Budget Level | Typical Scope | Red Flag? |
|---|---|---|
| $50K–$100K | Micro-budget feature, documentary | No, if realistic |
| $100K–$500K | Indie feature, limited locations | No, if justified |
| $500K–$2M | Mid-tier indie, named talent | No, with distribution plan |
| $2M+ | Commercial feature | Requires proven team + pre-sales |

**Budget Breakdown Analysis**:
- Pre-production: 10–20% (script, casting, permits)
- Production: 40–60% (shooting, crew, equipment)
- Post-production: 15–25% (edit, VFX, sound, color)
- Marketing: 10–20% (festivals, PR, distribution)
- Contingency: 5–10%

**Red Flag**: A $500K project with $50K allocated to post-production will look like a student film.

### 3. Revenue Plan

How will this project make money? A campaign with no revenue plan is a donation, not an investment.

**Strong Plans Include**:
- Distribution strategy (streaming, theatrical, festivals)
- Pre-sales or letters of intent from distributors
- Genre analysis (horror and documentary often have clearer paths than drama)
- Territory breakdown (domestic vs. international)
- Ancillary revenue (merchandise, soundtrack, remakes)

**Revenue Model Assessment**:

| Model | Predictability | Timeline | Examples |
|---|---|---|---|
| Streaming licensing | High | 6–18 months | Netflix, Amazon, Hulu |
| Theatrical | Medium | 12–36 months | Indie distributors |
| Festival prizes | Low | 6–12 months | Sundance, Cannes, TIFF |
| Self-distribution | Low | Variable | Direct-to-consumer |

### 4. Token Structure

**Supply Analysis**:
- Total supply = Total raised / Token price
- Lower supply + high demand = price appreciation potential
- High supply + low demand = price depression risk

**Pricing Assessment**:
- $1.00 per token is standard (1 USDC = 1 token)
- Higher prices ($5–$10) suggest niche or premium positioning
- Fractional prices ($0.10) suggest mass-market, high-volume strategy

**Risk Tier Monitoring**:
After graduation, check the token's RiskOracle tier:
- **GREEN**: Healthy — good liquidity, active trading, fresh pricing
- **YELLOW**: Caution — some staleness or elevated utilization
- **RED**: Risk — thin liquidity, possible manipulation, high borrowing

### 5. Community & Momentum

**Signals of a Healthy Campaign**:
- Active social media engagement
- Regular producer updates
- Growing investor base (diverse wallets, not a few whales)
- Trading volume post-graduation

**Signals of Trouble**:
- Producer goes silent after funding
- Trading volume collapses after launch
- Concentrated holdings (few wallets own most supply)
- No updates for weeks

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## Scoring Matrix

Rate each campaign 1–5 on the five pillars:

| Pillar | Weight | Score (1-5) | Weighted |
|---|---|---|---|
| Team & Track Record | 30% | | |
| Budget Realism | 25% | | |
| Revenue Plan | 20% | | |
| Token Structure | 15% | | |
| Community & Momentum | 10% | | |
| **Total** | **100%** | | **/5.0** |

**Interpretation**:
- **4.0–5.0**: Strong candidate. Consider significant position.
- **3.0–3.9**: Moderate. Diversify with smaller positions.
- **2.0–2.9**: Weak. High risk, only for speculative capital.
- **<2.0**: Avoid.

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## Portfolio Strategy

### Diversification Rules

- **No single project > 20%** of your entertainment token portfolio
- **Mix genres**: Horror, documentary, animation, and drama have different risk/reward profiles
- **Mix stages**: Some active campaigns, some graduated tokens trading, some in production
- **Geographic spread**: International projects may have different distribution dynamics

### Position Sizing

Consider the stage of the project:

| Stage | Risk Level | Suggested Allocation |
|---|---|---|
| Active campaign (not funded) | High | 1–5% of entertainment allocation |
| Graduated, pre-production | Medium-High | 5–10% |
| In production | Medium | 10–15% |
| Post-production / festival circuit | Medium | 10–15% |
| Released, revenue flowing | Lower | 15–25% |

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## Red Flags Checklist

Before investing, verify none of these apply:

- [ ] Producer has no verifiable credits
- [ ] Budget is unrealistic for the stated scope
- [ ] No revenue plan or distribution strategy
- [ ] Token supply is excessively high with no demand drivers
- [ ] Producer is unresponsive or evasive
- [ ] Social media is brand new or has fake followers
- [ ] Campaign has been extended multiple times (if allowed)
- [ ] RiskOracle shows RED tier with no explanation
- [ ] Wash trading suspected (same wallets trading repeatedly)
- [ ] Producer promises guaranteed returns

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*Next: [Trading & Yield Strategies](trading-yield.md) →*