International Domain Names (IDNs) are a way of encoding most of the Unicode character set into DNS names. The encoding used is called "punycode." Not part of punycode itself, but used in IDNs is the DNS label prefix "xn--".
Note that names which are just ASCII, do not get encoded. There is no need, regular DNS handles those fine. And names that are just ASCII, but don't start with "xn--" are not encoded, and won't decode to anything else. The point of IDN is to allow non-English words in hostnames, without changing the decades old DNS system that uses A to Z, 0 to 9 and - (hyphen) to name systems. Punycode is a translation of high-bit characters to strings within the allowed DNS range.
Characters that are not high-bit will not be altered, even if they are not allowed in DNS names: "AT&T.com" still is "AT&T.com". But "AT⅋T.com" would be "xn--ATT-ro1a.com".
A tip for making "fun" names, unless the characters are all identifers from the same language, browsers will likely not show the high-bit form in the URL bar for anti-name-spoofing protection. See the Unicode guidelines.
Source domain name: xn--j-0fa785tqfa.invalid
Converted domain name: jäṗḧ.invalid
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