I gave a cursory look at the source code.

• The database schema doesn't have columns for IP addresses anywhere, but notably not on users or posts.
• The only place I see IP addresses in the code is for rate limiting and it doesn't appear to be logged here.
• However, the default nginx configuration that reverse-proxies to Lemmy uses access logs that include the IP address.

So, from what I can tell, nobody can see your IP address through Lemmy. But the person who runs the server that your Lemmy instance runs on can trace IPs by looking at access logs. That doesn't get shared with other servers, or even people who adminster your Lemmy instance but don't have access to the underlying server.

Sorry for replying late; I just saw this question.

It's worth noting that images that people include in their posts are hosted on their instance, not your home instance. That means the admins of those other instances can see your IP address and (normally) page you were reading when your browser loads those images.

Browser extensions exist that will let you block off-site images if you want to.

Unlike Mastodon, one of the good things is that only you're instances system administrator has access to your IP: no mods nor site admins.

You can then use a VPN on top of that.