If you're an organization who is looking to set up a Mastodon server, you can do a neat trick regarding domains.
LOCAL_DOMAIN is the location of the Mastodon server itself, let's say social.cnn.com. Opening that page in a browser would open the login page to the instance. WEB_DOMAIN is an optional variable to allow users on your instance to have their user IDs addressed at the root domain.
So your could have the user accounts that at social.cnn.com have handles that federate as @user@cnn.com.
Makes domain verification a lot cleaner, and aligns better with existing email addresses. If it's deployed right, people could effectively search for your email address on any fedi server and find your social account.
This is sepcifically designed in case you have a web site at an existing root domain and want to use it for continuity in your social handle.