Does Staking an LP Token for Additional Yield Make the Loss More or Less Permanent?

Staking an LP token does not inherently change the permanence of the impermanent loss, as the loss is a function of the underlying asset prices. However, the additional yield earned from staking increases the overall profitability.

This extra yield acts as a greater buffer, making it more likely that the net return (yield + fees – IL) is positive, effectively offsetting the risk of the IL being a net permanent loss.