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What are some of the best ways to earn passive income right now? I was thinking about staking $CAKE, just staking it and not using liquidity farms. But not sure how profitable that would be, compared to some other methods. I have a 5000$ capital.

Staking Cake is good but does not pour your capital on one coin alone, there are a lot of ways to earn passive income and there is stable Farm sites worthy to look at be careful on new farm sites so many of these are doing rug pull, investing in the top coin, and hodling it, is also highly recommended, this is the best time to buy new upcoming projects with good potential like DPET and Binamon, they are gaming sites very much similar to Axie.

But I wonder is farming really worth it? Or providing liquidity? Isn't it quite dangerous to ultimately lose money because the staked coins or the coins you use for farming get dumped and decrease in value anyway?

That's value of researching and continuing to follow latest news with the project that you are participating. It's a must to know first what kind of asset you are staking your money before jumping into it and invest.

I like the ideas of finding those new projects who are offering usages coin like axie infinity which serves as very profitable in its hot season, finding those same kind of projects who also have good potentials will allow your money to work for you.

Dedicate your time is also important in quest to find the right valuable assets that will make your journey very successful.

Ok but still the biggest risk is if the underlying that you are staking drops significantly in value. That can happen anytime theoretically. Are you staking or farming coins and locking them even for several months thereby increasing your volatility exposure or are you preferring shorter periods of time?

That's correct, if you decide to stake coins or contribute them to farms you definitely are exposed to the risk of price declines or liquidity shortages leading to prices that can cause you disadvantages. Generally though staking is a great possibility to create passive income, but I would stick with strong coins that are known for not dying overnight.

That is why I am really hesitant to stake my coins even for a couple of weeks as we know how quick things can turn around and crash hard. You don't want to have your coins staked unless it is a coin that you really know well and trust in its recovery. Having your coins stuck can mean huge opportunity cost. That really must be considered when doing your calculations for rewards from staking your coins.

True, but I got a few coins that aren't worth that much anyway so I just stake them in a yield farm where you can earn not only the cryptocurrency you stake, but also some others that are part of the farm. It isn't much, but it does create at least a little bit of value before I leave them idle in the wallet.