In short: a Ponzi scheme is a fraud in which the "profit" of earlier investors is paid with money from new ones, with no real business behind it; it collapses when new money stops coming in.
Simply put: From outside it looks like a steady investment with regular payouts. Inside, money just passes from some people to others while the organiser takes a share. It is named after Charles Ponzi, who in Boston in 1919–1920 promised high profits in a short time. The best-known case is Bernard Madoff — a respected financier, arrested in December 2008 and sentenced in 2009 to 150 years in prison.
Example: "Only 2% a day" sounds small. Over a year: €1,000 × 1.02³⁶⁵ ≈ €1,377,408. No real business does this — the arithmetic itself gives the fraud away.
Watch out: suspiciously smooth "profit" without a single bad month is a warning sign, not a guarantee. Real investments go up and down.
How to spot it: ask "where does the return come from?" and "can I withdraw my money now?". A vague answer — stop.
Source: U.S. SEC, Investor.gov — "Ponzi Scheme": https://www.investor.gov/protect-your-investments/fraud/types-fraud/ponzi-scheme