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Punycode is a special encoding method that converts Unicode characters into an ASCII format that DNS and many internet systems can process. It is used for IDN domains (domains with Cyrillic, diacritics, and other national-script characters). For example, a domain written with native alphabet characters is technically converted into a string that usually starts with xn--.
In simple terms, Punycode is a “technical translator” that converts a human-readable domain name into a machine-compatible format. Users may see a domain in Cyrillic or another script, while DNS and browsers internally process its ASCII version. This allows IDN domains to work within the standard internet infrastructure.
Punycode is a way to write a domain with national-script characters (for example, Cyrillic) as an ASCII string so it can work in DNS. Users see the normal spelling, while the system uses a technical version.
Punycode is needed to make IDN domains compatible with DNS and other internet protocols that historically work with ASCII characters. Thanks to Punycode, domains in Cyrillic and other scripts can be correctly registered and opened in browsers.
The xn-- prefix means the domain is shown in Punycode format. You may see this in some systems, tools, or older services. This is normal: it is the technical format used to store and process an IDN domain.