diff --git a/frontend/editor3d/app/pages/PageEnigma/DragAndDrop/DndAsset.ts b/frontend/editor3d/app/pages/PageEnigma/DragAndDrop/DndAsset.ts
index 9add5bb681..88f3aaaf02 100644
--- a/frontend/editor3d/app/pages/PageEnigma/DragAndDrop/DndAsset.ts
+++ b/frontend/editor3d/app/pages/PageEnigma/DragAndDrop/DndAsset.ts
@@ -13,6 +13,8 @@ import {
   overTimeline,
   sidePanelWidth,
   timelineHeight,
+  assetModalVisibleDuringDrag,
+  reopenAfterDragSignal,
 } from "~/pages/PageEnigma/signals";
 import { pageHeight, pageWidth } from "~/signals";
 import { addShape } from "~/pages/PageEnigma/signals/shape";
@@ -42,6 +44,7 @@ class DndAsset {
       this.initY = event.pageY;
       canDrop.value = false;
       this.notDropText = "";
+      assetModalVisibleDuringDrag.value = false;
       window.addEventListener("pointerup", this.onPointerUp);
       window.addEventListener("pointermove", this.onPointerMove);
     }
@@ -54,6 +57,14 @@ class DndAsset {
       this.overElement = null;
       overTimeline.value = false;
       this.notDropText = "";
+      if (reopenAfterDragSignal.value) {
+        assetModalVisibleDuringDrag.value = true;
+      } else {
+        assetModalVisibleDuringDrag.value = true;
+        setTimeout(() => {
+          assetModalVisibleDuringDrag.value = false;
+        }, 0);
+      }
     }
   }
 
diff --git a/frontend/editor3d/app/pages/PageEnigma/PageEditor.tsx b/frontend/editor3d/app/pages/PageEnigma/PageEditor.tsx
index afa8c6b48b..b7d1538aaa 100644
--- a/frontend/editor3d/app/pages/PageEnigma/PageEditor.tsx
+++ b/frontend/editor3d/app/pages/PageEnigma/PageEditor.tsx
@@ -23,7 +23,6 @@ import {
 } from "~/pages/PageEnigma/signals";
 import { EditorCanvas } from "./comps/EngineCanvases";
 import { SceneContainer } from "./comps/SceneContainer";
-import { AspectRatioMenu } from "./comps/AspectRatioMenu";
 import { Outliner } from "./comps/Outliner";
 import { CameraAspectRatio } from "./enums";
 import { PromptBox } from "./comps/PromptBox";
@@ -95,7 +94,6 @@ export const PageEditor = () => {
           className="flex"
           style={{
             height,
-            width,
           }}
         >
           <div className="relative w-full overflow-hidden bg-transparent">
@@ -136,10 +134,12 @@ export const PageEditor = () => {
                 <Outliner />
                 <PreviewEngineCamera />
               </div>
-              <PromptBox />
+
               <ControlPanelSceneObject />
             </div>
 
+            <PromptBox />
+
             <LoadingDots
               className="absolute left-0 top-0"
               isShowing={editorLoader.value.isShowing}
@@ -150,9 +150,9 @@ export const PageEditor = () => {
         </div>
 
         {/* Side panel */}
-        <div onClick={handleOverlayClick}>
+        {/* <div onClick={handleOverlayClick}>
           <SidePanel />
-        </div>
+        </div> */}
       </div>
 
       {/* Timeline */}
diff --git a/frontend/editor3d/app/pages/PageEnigma/comps/AssetMenu/AssetMenu.tsx b/frontend/editor3d/app/pages/PageEnigma/comps/AssetMenu/AssetMenu.tsx
index ba8ea8b22d..1114003d17 100644
--- a/frontend/editor3d/app/pages/PageEnigma/comps/AssetMenu/AssetMenu.tsx
+++ b/frontend/editor3d/app/pages/PageEnigma/comps/AssetMenu/AssetMenu.tsx
@@ -2,6 +2,7 @@ import { faCube, faMagicWandSparkles } from "@fortawesome/pro-solid-svg-icons";
 import { Button, Tooltip } from "~/components";
 import { useState } from "react";
 import { AssetModal } from "./AssetModal";
+import { assetModalVisibleDuringDrag } from "../../signals";
 
 export const AssetMenu = () => {
   const [isModalOpen, setIsModalOpen] = useState(false);
@@ -11,6 +12,11 @@ export const AssetMenu = () => {
     console.log("Adding asset...");
   };
 
+  const handleOpenModal = () => {
+    assetModalVisibleDuringDrag.value = true;
+    setIsModalOpen(true);
+  };
+
   return (
     <>
       <div className="glass absolute left-2 top-1/2 flex -translate-y-1/2 flex-col gap-1 rounded-lg p-1">
@@ -18,7 +24,7 @@ export const AssetMenu = () => {
           <Button
             icon={faCube}
             className="h-12 w-12 text-lg"
-            onClick={() => setIsModalOpen(true)}
+            onClick={handleOpenModal}
           />
         </Tooltip>
         <Tooltip
@@ -31,7 +37,7 @@ export const AssetMenu = () => {
             className="h-12 w-12 text-lg"
             variant="secondary"
             disabled={true}
-            onClick={() => setIsModalOpen(true)}
+            onClick={handleOpenModal}
           />
         </Tooltip>
       </div>
diff --git a/frontend/editor3d/app/pages/PageEnigma/comps/AssetMenu/AssetModal.tsx b/frontend/editor3d/app/pages/PageEnigma/comps/AssetMenu/AssetModal.tsx
index 6b04a87a31..f84b4454f1 100644
--- a/frontend/editor3d/app/pages/PageEnigma/comps/AssetMenu/AssetModal.tsx
+++ b/frontend/editor3d/app/pages/PageEnigma/comps/AssetMenu/AssetModal.tsx
@@ -3,16 +3,30 @@ import {
   faPlus,
   faSearch,
   faChevronRight,
+  faChevronLeft,
+  faLayerGroup,
+  faUser,
+  faSun,
+  faTree,
+  faCube,
 } from "@fortawesome/pro-solid-svg-icons";
 import { FontAwesomeIcon } from "@fortawesome/react-fontawesome";
 import { Button, CloseButton, Input, Tooltip } from "~/components";
 import { TabSelector } from "~/components/reusable/TabSelector";
-import { useState, useEffect, useMemo } from "react";
+import { useState, useEffect, useMemo, useRef } from "react";
 import { ItemElements } from "../SidePanelTabs/sharedComps/ItemElements";
-import { demoSkyboxItems, demoShapeItems } from "../../signals";
+import {
+  demoSkyboxItems,
+  demoShapeItems,
+  demoCharacterItems,
+  assetModalVisibleDuringDrag,
+  reopenAfterDragSignal,
+} from "../../signals";
 import { MediaItem } from "../../models";
 import { useUserObjects, useFeaturedObjects } from "../SidePanelTabs/hooks";
 import { FilterEngineCategories } from "~/enums";
+import { twMerge } from "tailwind-merge";
+import { useSignals } from "@preact/signals-react/runtime";
 
 interface AssetModalProps {
   isOpen: boolean;
@@ -23,6 +37,7 @@ interface AssetModalProps {
 type AssetTab = {
   id: string;
   label: string;
+  icon: typeof faLayerGroup;
   engineCategory?: FilterEngineCategories;
   items: MediaItem[];
 };
@@ -36,9 +51,9 @@ const AllTabSection = ({
   items: MediaItem[];
   onViewAll: () => void;
 }) => (
-  <div className="mb-8">
+  <div className="mb-0">
     <div className="mb-3 flex items-center justify-between">
-      <h3 className="text-lg font-medium opacity-90">{label}</h3>
+      <h3 className="text-md font-semibold opacity-90">{label}</h3>
       <Button
         variant="secondary"
         className="flex items-center gap-1 px-2 py-1 text-sm"
@@ -48,7 +63,7 @@ const AllTabSection = ({
         <FontAwesomeIcon icon={faChevronRight} className="text-xs opacity-70" />
       </Button>
     </div>
-    <div className="h-[200px]">
+    <div className="h-[170px]">
       <ItemElements
         items={items.slice(0, 4)}
         busy={false}
@@ -63,9 +78,27 @@ export const AssetModal = ({
   onClose,
   onAddAsset,
 }: AssetModalProps) => {
+  useSignals();
   const [activeLibraryTab, setActiveLibraryTab] = useState("library");
   const [activeAssetTab, setActiveAssetTab] = useState("all");
   const [searchTerm, setSearchTerm] = useState("");
+  const [reopenAfterAdd, setReopenAfterAdd] = useState(true);
+  const searchInputRef = useRef<HTMLInputElement>(null);
+
+  // Update the signal when the preference changes
+  useEffect(() => {
+    reopenAfterDragSignal.value = reopenAfterAdd;
+  }, [reopenAfterAdd]);
+
+  useEffect(() => {
+    if (isOpen) {
+      // Small delay to ensure the modal is fully mounted
+      const timer = setTimeout(() => {
+        searchInputRef.current?.focus();
+      }, 100);
+      return () => clearTimeout(timer);
+    }
+  }, [isOpen]);
 
   // Fetch objects for different categories
   const { userObjects: userCharacters } = useUserObjects({
@@ -103,25 +136,29 @@ export const AssetModal = ({
     { id: "mine", label: "Mine" },
   ];
 
+  // eslint-disable-next-line react-hooks/exhaustive-deps
   const assetTabs: AssetTab[] = [
-    { id: "all", label: "All", items: [] },
+    { id: "all", label: "All", icon: faLayerGroup, items: [] },
     {
       id: "character",
       label: "Character",
+      icon: faUser,
       engineCategory: FilterEngineCategories.CHARACTER,
       items:
         activeLibraryTab === "library"
-          ? (featuredCharacters ?? [])
+          ? [...demoCharacterItems.value, ...(featuredCharacters ?? [])]
           : (userCharacters ?? []),
     },
     {
       id: "skybox",
       label: "Skybox",
+      icon: faSun,
       items: demoSkyboxItems.value,
     },
     {
       id: "nature",
       label: "Nature",
+      icon: faTree,
       engineCategory: FilterEngineCategories.SET_DRESSING,
       items:
         activeLibraryTab === "library"
@@ -131,6 +168,7 @@ export const AssetModal = ({
     {
       id: "objects",
       label: "Objects",
+      icon: faCube,
       engineCategory: FilterEngineCategories.OBJECT,
       items:
         activeLibraryTab === "library"
@@ -171,12 +209,13 @@ export const AssetModal = ({
     if (searchTerm && activeAssetTab !== "all") {
       setActiveAssetTab("all");
     }
+    // eslint-disable-next-line react-hooks/exhaustive-deps
   }, [searchTerm]);
 
   const renderContent = () => {
     if (activeAssetTab === "all" && !searchTerm) {
       return (
-        <div className="space-y-2">
+        <div className="h-full space-y-2 overflow-y-auto">
           {assetTabs.slice(1).map((tab) => (
             <AllTabSection
               key={tab.id}
@@ -198,43 +237,72 @@ export const AssetModal = ({
     );
   };
 
+  const handleAddAsset = () => {
+    onAddAsset();
+    if (reopenAfterAdd) {
+      // Small delay to allow the modal to close and reopen
+      setTimeout(() => {
+        onClose();
+      }, 100);
+    } else {
+      onClose();
+    }
+  };
+
   return (
     <TransitionDialogue
-      isOpen={isOpen}
+      isOpen={isOpen && assetModalVisibleDuringDrag.value}
       onClose={onClose}
-      className="h-[640px] max-w-5xl"
+      className="h-[640px] max-w-4xl"
       childPadding={false}
     >
       <div className="grid h-full grid-cols-12 gap-3">
-        <div className="relative col-span-3 p-3 pt-2 after:absolute after:right-0 after:top-0 after:h-full after:w-px after:bg-gray-200 after:dark:bg-white/10">
+        <div className="relative col-span-3 flex h-full flex-col p-3 pt-2 after:absolute after:right-0 after:top-0 after:h-full after:w-px after:bg-gray-200 after:dark:bg-white/10">
           <div className="flex items-center justify-between gap-2.5 py-0.5">
             <h2 className="text-[18px] font-semibold opacity-80">3D Assets</h2>
             <Tooltip content="Upload model" position="top" delay={200}>
               <Button
                 className="h-6 w-6 rounded-full border-none bg-transparent text-white/70 transition-colors hover:bg-transparent hover:text-white/100"
-                onClick={onAddAsset}
+                onClick={handleAddAsset}
               >
                 <FontAwesomeIcon icon={faPlus} className="text-xl" />
               </Button>
             </Tooltip>
           </div>
           <hr className="my-2 w-full border-white/10" />
-          <div className="space-y-1">
+          <div className="space-y-2">
             {assetTabs.map((tab) => (
               <Button
                 key={tab.id}
                 variant={activeAssetTab === tab.id ? "primary" : "secondary"}
-                className="w-full justify-start text-left"
+                className={twMerge(
+                  "w-full justify-start rounded-xl border border-white/[2%] bg-white/[4%] px-3.5 py-2.5 text-left hover:bg-white/15",
+                  activeAssetTab === tab.id &&
+                    "border-brand-primary bg-brand-primary/10 hover:bg-brand-primary/10",
+                )}
                 onClick={() => setActiveAssetTab(tab.id)}
               >
+                <FontAwesomeIcon icon={tab.icon} className="mr-2 opacity-70" />
                 {tab.label}
               </Button>
             ))}
           </div>
+          <div className="mt-auto flex items-center gap-2 pt-3">
+            <input
+              type="checkbox"
+              id="reopen-after-add"
+              checked={reopenAfterAdd}
+              onChange={(e) => setReopenAfterAdd(e.target.checked)}
+              className="h-4 w-4 rounded-lg border-gray-300 bg-gray-700 text-brand-primary focus:ring-brand-primary"
+            />
+            <label htmlFor="reopen-after-add" className="text-sm text-white/70">
+              Reopen after adding
+            </label>
+          </div>
         </div>
-        <div className="col-span-9 p-3 ps-0 pt-2">
+        <div className="col-span-9 p-3 pb-0 ps-0 pt-2">
           <div className="flex h-full flex-col">
-            <div>
+            <div className="h-full">
               <div className="flex items-center gap-4">
                 <TabSelector
                   tabs={libraryTabs}
@@ -243,6 +311,7 @@ export const AssetModal = ({
                   className="w-auto"
                 />
                 <Input
+                  ref={searchInputRef}
                   placeholder="Search"
                   className="grow"
                   icon={faSearch}
@@ -251,13 +320,25 @@ export const AssetModal = ({
                 />
                 <CloseButton onClick={onClose} />
               </div>
-              <div className="mt-4 h-[480px] overflow-y-auto">
+              <div className="mt-4 h-[574px] overflow-hidden">
+                {activeAssetTab !== "all" && !searchTerm && (
+                  <div className="mb-3 flex items-center font-semibold">
+                    <Button
+                      variant="secondary"
+                      className="flex items-center gap-2 border-none bg-transparent px-3 py-1.5 text-sm text-white/70 hover:bg-transparent hover:text-white/100"
+                      onClick={() => setActiveAssetTab("all")}
+                    >
+                      <FontAwesomeIcon
+                        icon={faChevronLeft}
+                        className="text-sm font-semibold opacity-70"
+                      />
+                    </Button>
+                    {currentTab.label}
+                  </div>
+                )}
                 {renderContent()}
               </div>
             </div>
-            <div className="mt-auto flex justify-end pt-4">
-              <Button onClick={onClose}>Done</Button>
-            </div>
           </div>
         </div>
       </div>
diff --git a/frontend/editor3d/app/pages/PageEnigma/comps/SceneContainer/SceneContainer.tsx b/frontend/editor3d/app/pages/PageEnigma/comps/SceneContainer/SceneContainer.tsx
index c71d6f259e..fb52a50062 100644
--- a/frontend/editor3d/app/pages/PageEnigma/comps/SceneContainer/SceneContainer.tsx
+++ b/frontend/editor3d/app/pages/PageEnigma/comps/SceneContainer/SceneContainer.tsx
@@ -1,12 +1,7 @@
 import { useCallback, useContext } from "react";
 import { useSignals } from "@preact/signals-react/runtime";
 import { pageHeight, pageWidth } from "~/signals";
-import {
-  editorLetterBox,
-  timelineHeight,
-  sidePanelWidth,
-  sidePanelVisible,
-} from "~/pages/PageEnigma/signals";
+import { editorLetterBox, timelineHeight } from "~/pages/PageEnigma/signals";
 import { EngineContext } from "~/pages/PageEnigma/contexts/EngineContext";
 import { Letterbox } from "./Letterbox";
 
@@ -14,8 +9,7 @@ export const SceneContainer = ({ children }: { children: React.ReactNode }) => {
   useSignals();
   const editorEngine = useContext(EngineContext);
 
-  const containerWidth =
-    pageWidth.value - (sidePanelVisible.value ? sidePanelWidth.value : 0) - 84;
+  const containerWidth = pageWidth.value;
 
   const containerHeight = pageHeight.value - timelineHeight.value - 64;
 
diff --git a/frontend/editor3d/app/pages/PageEnigma/comps/SidePanelTabs/sharedComps/ItemElement.tsx b/frontend/editor3d/app/pages/PageEnigma/comps/SidePanelTabs/sharedComps/ItemElement.tsx
index 819f3167d4..2c1cf89464 100644
--- a/frontend/editor3d/app/pages/PageEnigma/comps/SidePanelTabs/sharedComps/ItemElement.tsx
+++ b/frontend/editor3d/app/pages/PageEnigma/comps/SidePanelTabs/sharedComps/ItemElement.tsx
@@ -66,7 +66,7 @@ export const ItemElement = ({ item }: Props) => {
           />
         )}
       </div>
-      <div className="pointer-events-none w-full select-none truncate py-1.5 text-start text-[13px] transition-all duration-200 ">
+      <div className="pointer-events-none w-full select-none truncate py-1.5 text-start text-[13px] text-white/80 transition-all duration-200">
         {item.name || item.media_id}
       </div>
     </div>
diff --git a/frontend/editor3d/app/pages/PageEnigma/signals/assetModal.ts b/frontend/editor3d/app/pages/PageEnigma/signals/assetModal.ts
new file mode 100644
index 0000000000..b66116b5d2
--- /dev/null
+++ b/frontend/editor3d/app/pages/PageEnigma/signals/assetModal.ts
@@ -0,0 +1,4 @@
+import { signal } from "@preact/signals-react";
+
+export const assetModalVisibleDuringDrag = signal(true);
+export const reopenAfterDragSignal = signal(true);
diff --git a/frontend/editor3d/app/pages/PageEnigma/signals/index.ts b/frontend/editor3d/app/pages/PageEnigma/signals/index.ts
index e3c2a1d293..f348ce199e 100644
--- a/frontend/editor3d/app/pages/PageEnigma/signals/index.ts
+++ b/frontend/editor3d/app/pages/PageEnigma/signals/index.ts
@@ -18,3 +18,4 @@ export * from "./stylizeTab";
 export * from "./timing";
 export * from "./timeline";
 export * from "./error";
+export * from "./assetModal";