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Collections are a way for you to organize kata so that you can create your own training routines. Every collection you create is public and automatically sharable with other warriors. After you have added a few kata to a collection you and others can train on the kata contained within the collection.
Get started now by creating a new collection.
I assume he meant to extract the SLD, but I agree this should be clarified in the description.
Furthermore I have to say, that testcases would be nice and you should also include the original URLs in the optional message.
test.assert_equals(domain_name("http://example.com"), "example", "Testing http://example.com")