Can the Collected Fees Entirely Negate the Effects of Impermanent Loss?

Yes, the collected fees can entirely negate the effects of impermanent loss, resulting in a net profit for the liquidity provider compared to the HODL strategy. This typically happens in pools with very high trading volume, low volatility (leading to low IL), or over a long time horizon.

The net result depends on the cumulative fees exceeding the opportunity cost of the IL at the time of withdrawal.