@WMio Connectors , Yes, the domain needs to be verified as based on the verified domain name your app's unique App ID URI is created [for eg: https://contoso.com/myapp]. If your domain is not verified, then you can use your tenant's name also for the App ID URI [for eg: https://contoso.com/myapp].
For more information on building Multitenant apps for Azure AD, you can refer to the following article:
Hope this helps.
Do let us know if this helps and if there are any more queries around this, please do let us know so that we can help you further. Also, please do not forget to accept the response as "Answer" if the above response helped in answering your query.