This works because clients will query to see if `user@domain` exists in a specific location: "example.com/.well-known/nostr.json?name=" You can use a nip05 provider or set it up on a domain that you control. Tools exist for this such as https://resources.davidcoen.it/nip05creator/.

Further information on setting this up via various clients can be found here: https://help.nostrplebs.com/hc/nostrplebs/articles/1671910544-setting-up-nip_05