Sender domain is the the address which recipients see in the from field when they open your emails. Eg. when you see sign up confirmation email of Pepipost, you see it coming from firstname.lastname@example.org. Here “pepipost.com” is the sender domain.
To start sending emails to your customers, you can use either your top level domain eg. mycompany.com or you can use a sub-domain like email.mycompany.com.