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

**Published:** 2025-12-05
**Author:** Greeks.live
**Categories:** Path

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## 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.

- [In a Volatile Market, Is a Trader More Likely to Experience Positive or Negative Slippage?](https://learn.greeks.live/path/in-a-volatile-market-is-a-trader-more-likely-to-experience-positive-or-negative-slippage/)

- [How Does the Yield Generated from Staking Compare to the Premium Earned from Selling Covered Call Options?](https://learn.greeks.live/path/how-does-the-yield-generated-from-staking-compare-to-the-premium-earned-from-selling-covered-call-options/)

- [How Does the Market Capitalization of the Governance Token Relate to the Stablecoin’s Security?](https://learn.greeks.live/path/how-does-the-market-capitalization-of-the-governance-token-relate-to-the-stablecoins-security/)

- [How Does the ‘Liquidation Price’ Change with Varying Leverage Levels?](https://learn.greeks.live/path/how-does-the-liquidation-price-change-with-varying-leverage-levels/)

- [Does the Time Remaining until Expiration Make Early Exercise of an In-the-Money Put More or Less Likely?](https://learn.greeks.live/path/does-the-time-remaining-until-expiration-make-early-exercise-of-an-in-the-money-put-more-or-less-likely/)

- [How Does the Collateralization Ratio of a Stablecoin Influence Its Vulnerability to a Death Spiral?](https://learn.greeks.live/path/how-does-the-collateralization-ratio-of-a-stablecoin-influence-its-vulnerability-to-a-death-spiral/)

- [What Is the Difference between Proof-of-Stake (PoS) Staking and Liquidity Pool Staking?](https://learn.greeks.live/path/what-is-the-difference-between-proof-of-stake-pos-staking-and-liquidity-pool-staking/)

- [What Is the Risk of “Centralized” Metadata Storage for an NFT?](https://learn.greeks.live/path/what-is-the-risk-of-centralized-metadata-storage-for-an-nft/)

## Discover More

### [Why Are Larger Blockchains like Bitcoin Less Susceptible to a 51% Attack?](https://learn.greeks.live/path/why-are-larger-blockchains-like-bitcoin-less-susceptible-to-a-51-attack/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Why Are Larger Blockchains like Bitcoin Less Susceptible to a 51% Attack?](https://learn.greeks.live/wp-content/uploads/2025/10/Decentralized-Finance-Protocol-Architecture-Intersecting-Multi-Asset-Volatility-Surface-Structuring.webp)

The financial cost to acquire 51% of the required hash rate is prohibitively high, and the decentralized nature of the mining community acts as a defense.

### [Can a Successful 51% Attack Lead to a Permanent Split in the Blockchain Community?](https://learn.greeks.live/path/can-a-successful-51-attack-lead-to-a-permanent-split-in-the-blockchain-community/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Can a Successful 51% Attack Lead to a Permanent Split in the Blockchain Community?](https://learn.greeks.live/wp-content/uploads/2025/10/Decentralized-Exchange-Liquidity-Pool-Split-Illustrating-Bifurcated-Asset-Pricing-Mechanisms.webp)

A severe attack can force a community-led hard fork to reverse the malicious chain, resulting in a permanent split and two separate coins.

### [What Is the Difference between Nominal Yield and Real Yield in a High-Inflation Crypto Environment?](https://learn.greeks.live/path/what-is-the-difference-between-nominal-yield-and-real-yield-in-a-high-inflation-crypto-environment/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Difference between Nominal Yield and Real Yield in a High-Inflation Crypto Environment?](https://learn.greeks.live/wp-content/uploads/2025/10/Macro-Visualization-of-Decentralized-Finance-Ledger-Mechanism-and-Volatility-Hedging-Structures.webp)

Nominal yield is the return before inflation; real yield is the return after inflation, measuring true purchasing power change.

### [How Does the Yield Generated from Staking Compare to the Premium Earned from Selling Covered Call Options?](https://learn.greeks.live/path/how-does-the-yield-generated-from-staking-compare-to-the-premium-earned-from-selling-covered-call-options/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does the Yield Generated from Staking Compare to the Premium Earned from Selling Covered Call Options?](https://learn.greeks.live/wp-content/uploads/2025/10/Refraction-Dynamics-of-Glass-Geometries-Simulating-Volatility-Surface-Skew-in-Digital-Asset-Options.webp)

Staking provides continuous, network-determined yield (like a bond); covered calls provide upfront premium but cap upside potential.

### [How Does a Proof-of-Stake System Make a 51% Attack More Difficult Compared to Proof-of-Work?](https://learn.greeks.live/path/how-does-a-proof-of-stake-system-make-a-51-attack-more-difficult-compared-to-proof-of-work/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does a Proof-of-Stake System Make a 51% Attack More Difficult Compared to Proof-of-Work?](https://learn.greeks.live/wp-content/uploads/2025/10/Decentralized-Finance-Protocol-Mechanism-Visualization-Near-an-Algorithmic-Options-Pricing-Surface.webp)

In Proof-of-Stake, an attacker must buy the kingdom to rule it, and if they misbehave, the kingdom burns with them in it.

### [Does an In-the-Money Option Experience Less Time Decay than an Out-of-the-Money Option?](https://learn.greeks.live/path/does-an-in-the-money-option-experience-less-time-decay-than-an-out-of-the-money-option/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Does an In-the-Money Option Experience Less Time Decay than an Out-of-the-Money Option?](https://learn.greeks.live/wp-content/uploads/2025/10/Microscopic-View-of-DeFi-Liquidity-Pool-Front-End-Module-Reflecting-Token-Implied-Volatility-Surface.webp)

ATM options experience the most decay; ITM and OTM options generally have lower Theta, with deep ITM options having the least.

### [How Does the Concept of "Impermanent Loss" Relate to Staking?](https://learn.greeks.live/path/how-does-the-concept-of-impermanent-loss-relate-to-staking/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does the Concept of "Impermanent Loss" Relate to Staking?](https://learn.greeks.live/wp-content/uploads/2025/10/Abstract-Depiction-of-Decentralized-Autonomous-Organization-Governance-Token-Volatility-Through-Quantum-Entanglement-Visualization.webp)

Impermanent loss is a risk of providing liquidity (yield farming), not native staking, where asset price changes cause a relative loss.

### [Does a Liquidity Pool with Highly Correlated Assets Experience Less Impermanent Loss?](https://learn.greeks.live/path/does-a-liquidity-pool-with-highly-correlated-assets-experience-less-impermanent-loss/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Does a Liquidity Pool with Highly Correlated Assets Experience Less Impermanent Loss?](https://learn.greeks.live/wp-content/uploads/2025/10/Polished-Architectural-Finial-Sphere-Interfacing-with-Beige-Casing-High-Frequency-Trading-Mechanism.webp)

Yes, high correlation means minimal price ratio divergence, which is the direct cause of impermanent loss.

### [How Do Decentralized Exchanges (DEXs) with Low Liquidity Make an Oracle Vulnerable?](https://learn.greeks.live/path/how-do-decentralized-exchanges-dexs-with-low-liquidity-make-an-oracle-vulnerable/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Do Decentralized Exchanges (DEXs) with Low Liquidity Make an Oracle Vulnerable?](https://learn.greeks.live/wp-content/uploads/2025/10/Angular-Bifurcation-Of-A-Digital-Asset-Hinge-Mechanism-Displaying-Polarization-Filters.webp)

Low liquidity allows a smaller trade to cause a disproportionately large price shift, which a single-source oracle then incorrectly reports.

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**Original URL:** https://learn.greeks.live/learn/does-staking-an-lp-token-for-additional-yield-make-the-loss-more-or-less-permanent/
