but I still want to know how it works

If you're referring to the eval thing, that would be:

#!/usr/bin/perl -l
use strict;
use warnings;

my $hash = { domain => { foo => { bar => "baz" } } };

my $domain = "domain";
my $var1   = "foo";
my $var2   = "bar";

my $test = '{$var1}{$var2}';

my $value = eval '$hash->{$domain}'.$test;

print $value;   # "baz"
[download]

That said, better stay away from eval unless you know what you're doing, because

• it's potentially dangerous when you overlook something (e.g. when the value of $test might originate from somewhere not under your full control)
• code using it is unnecessarily hard to read and maintain
• it's unnecessarily slow

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