How does impermanent loss work with a stablecoin?

If the stablecoin is truly stable, then you'll have minimal impermanent loss, or none at all. However, if the stablecoin isn't backed by real cash, you might suffer from some impermanent loss. Some examples of fiat-backed stablecoins are USDT and USDC. They are quite stable and almost never fluctuate more than 2% in price. On the other hand, crypto-backed stablecoins like DAI (ETH-backed) or algorithmic ones like USDN are more volatile, so you can expect some impermanent loss from them.