I created a component and an instance of it. When I try to build a wireframe within the instance, it doesn’t work. However, when I build the wireframe within the component, it works. Why?
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That’s how it works. Instance is just a copy of your component and you can’t modify it but you can hide or change the properties of layers inside of it. https://help.figma.com/hc/en-us/articles/360038662654-Guide-to-components-in-Figma
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