Can an LP’s Initial Deposit Value Ever Be Less than the Withdrawal Value, Even with Impermanent Loss?
Yes, an LP's withdrawal value can be higher than the initial deposit value even if impermanent loss has occurred. Impermanent loss is calculated as the difference between the HODL value and the pool value.
If the overall market value of both tokens has increased significantly, the LP can still profit. The profit is the sum of the value increase of the tokens plus the accrued trading fees, minus the impermanent loss.
A net positive return is common in bull markets.
