How do you allow users to add a custom domain?

I used caddy server to achieve that. Feel free to reach me if you need any help in configuring it :) https://www.indiehackers.com/post/generating-ssl-certs-on-demand-with-caddy-server-69ad07a3fb

My guess would be:
1 - Have the user CNAME the domain to your server (or sell them the domain and do this yourself)
2 - Have those domains on a database table mapped to a user
3 - When you get a request look at that table and find out what user it is, if the domain is not your main domain (or you might abstract this from your application by doing it on the webserver, maybe openresty with lua plugin calling on a API, and setting a header with the user ID)
4 - Do your stuff

Step 3 would probably need to be heavily cached or you would probably rip your server a new one

Just saw this on Betalist
https://app.margashield.com/?ref=betalist

Customer adds CNAME dns pojnting to any record you control.
Do NOT give them an IP for an A record, you will regret it if you ever move server. CNAME gives you update control.

Nginx proxy server, with letsencrypt installed.
Container recommended if you are docker/kubernetes based, but cloud/dedicated server can work too.
Shared filesystem of some sort between nginx config folder and your core signup/member system.
User adds their custom domain, nginx config created, letsencrypt ssl generated, proxy reloaded.

Few hours to few days work depending on system architecture and experience in these things, simple and reliable once running.

if you don't yet have hosting, Netlify supports this via API. you can send new domains to attach to an existing site and have SSL automatically from LetsEncrypt. this would be front-end only. on the back, like others mention, it'd be a matter of looking up the domain in the request then branching into whatever is needed.

I never developed some projects that required such feature because it seems complicated.
I would love to see a service (api) that can do it all the flow easily!!

If you're using Ngnix then a simple solution would be to sync a config for each of your users. You would have a form that saves the domain to you DB and when that form is submitted you also sync the Nginx config for the domain. Easy to understand and easy to maintain.

For auto SSL check out https://certbot.eff.org/

Our users have unique subdomains, which they can then use a CNAME with. On small / mvp projects we blindly assume a request coming in on a domain is legit, look up a paired subdomain, then route / fail accordingly. As a project grows or leaves mvp we start verifying domains before they'll route.

This was just published in PH few days ago:
https://www.producthunt.com/posts/qloaked

For a system like this:
DNS Server (to be used for domain name resolution)
Web Server integration (to be used for domain forwarding)
Application (to be set up for domain-specific response)

The user updates the domain's name servers to ns1.example.com. Your name server resolves this domain and redirects it to the application server.

Your web server checks whether an incoming request (domain name) exists. Then it redirects to the application.

The application responds by domain name.

https://emlakpro.net this application is also used in this.