In What Scenarios Is the Impermanent Loss Risk Generally Considered Acceptable for an LP?

Impermanent loss risk is considered acceptable when the expected returns from trading fees and/or farming rewards significantly outweigh the potential magnitude of the loss. This is often the case in high-volume, low-volatility pools (like stablecoin pairs) or pools offering very high governance token incentives.

LPs also accept the risk when they believe the price ratio will eventually revert to the initial ratio.