diff --git a/FEATURES.md b/FEATURES.md
index 74c88b51ee..6fffdd76d3 100644
--- a/FEATURES.md
+++ b/FEATURES.md
@@ -8,6 +8,7 @@ Note that following list of changes compared to Element X is likely incomplete,
 - Schildi theme with more neutral colors and some design tweaks †
 - Schildi layout tweaks †
 - Faster screen transitions †
+- Show avatar placeholders instead of blank space for avatars that failed to load
 - App icon & branding ⸸
 
 
diff --git a/libraries/designsystem/src/main/kotlin/io/element/android/libraries/designsystem/components/avatar/Avatar.kt b/libraries/designsystem/src/main/kotlin/io/element/android/libraries/designsystem/components/avatar/Avatar.kt
index 3aa0516041..42a30599df 100644
--- a/libraries/designsystem/src/main/kotlin/io/element/android/libraries/designsystem/components/avatar/Avatar.kt
+++ b/libraries/designsystem/src/main/kotlin/io/element/android/libraries/designsystem/components/avatar/Avatar.kt
@@ -23,6 +23,7 @@ import androidx.compose.foundation.layout.Row
 import androidx.compose.foundation.layout.size
 import androidx.compose.foundation.shape.CircleShape
 import androidx.compose.runtime.Composable
+import androidx.compose.runtime.SideEffect
 import androidx.compose.ui.Alignment
 import androidx.compose.ui.Modifier
 import androidx.compose.ui.draw.clip
@@ -35,6 +36,9 @@ import androidx.compose.ui.unit.dp
 import androidx.compose.ui.unit.sp
 import chat.schildi.theme.ScTheme
 import coil.compose.AsyncImage
+import coil.compose.AsyncImagePainter
+import coil.compose.SubcomposeAsyncImage
+import coil.compose.SubcomposeAsyncImageContent
 import io.element.android.compound.theme.ElementTheme
 import io.element.android.libraries.designsystem.colors.AvatarColorsProvider
 import io.element.android.libraries.designsystem.preview.ElementThemedPreview
@@ -74,16 +78,26 @@ private fun ImageAvatar(
     modifier: Modifier = Modifier,
     contentDescription: String? = null,
 ) {
-    AsyncImage(
+    SubcomposeAsyncImage(
         model = avatarData,
-        onError = {
+        /*onError = {
             Timber.e(it.result.throwable, "Error loading avatar $it\n${it.result}")
-        },
+        },*/
         contentDescription = contentDescription,
         contentScale = ContentScale.Crop,
-        placeholder = debugPlaceholderAvatar(),
+        //placeholder = debugPlaceholderAvatar(),
         modifier = modifier
-    )
+    ) {
+        val state = painter.state
+        if (state is AsyncImagePainter.State.Success) {
+            SubcomposeAsyncImageContent()
+        } else if (state is AsyncImagePainter.State.Error) {
+            SideEffect {
+                Timber.e(state.result.throwable, "Error loading avatar $state\n${state.result}")
+            }
+            InitialsAvatar(avatarData = avatarData)
+        }
+    }
 }
 
 @Composable