How Do Multi-Asset Pools Handle the Addition or Removal of a Token in Relation to Existing Liquidity Providers’ Impermanent Loss?

Adding or removing a token from a multi-asset pool is a complex governance-driven process that fundamentally alters the pool's invariant. This action typically requires deploying a new pool contract and migrating liquidity.

For existing LPs, this event crystallizes their impermanent loss at the moment of migration. The decision to change the composition forces a realization of any gains or losses, as the basis of their liquidity provision (the specific basket of assets) is being changed.

It is not a dynamic process within a live pool.