Custom tracking domain
A custom tracking domain is a subdomain of your own, such as track.yourdomain.com, used for open and click tracking links in your emails.
When a tool tracks clicks, it rewrites your links so they go through the tool's server first. When it tracks opens, it adds an image from that server. By default the links use a domain that belongs to the tool and is shared by many senders. If another sender on that domain behaves badly, your mail is affected too.
A custom tracking domain solves this. You create a subdomain of your own and point it at the tool with a CNAME record. Tracking links then show your domain, they match the domain you send from, and the reputation is yours alone.
Use a subdomain, not the root domain, because a root domain usually cannot take a CNAME. Check that the record resolves and that the link works over HTTPS before you send. Also keep tracking low: fewer rewritten links and no tracking at all on the first email are options that many cold senders choose, because less tracking means fewer spam signals.
In Terlido
In Terlido you add a tracking domain and point it with a CNAME, and Terlido checks the record. When a domain is verified, open tracking, click tracking and the unsubscribe link use it.