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I tried to search for "Punycode" and god it's a rabbit hole especially because people didn't read the standards:
- Punycode actually describes an algorithms known as "Bootsring" to encode Unicode characters into ASCII [RFC3492]
- The "XN--" (not case sensitive) people put in front of their Punycode strings is only a LDH label (let-dig-hyp, letter, digit, hyphen, describing the valid characters in a domain name) [RFC5891] to indicate the everything after is a Punycode encoded string