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Do I have to purchase a domain to make an instance here?
(sh.itjust.works)
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Cloudflare are the cheapest domain registrar since they take zero profit from the sale. You will not find anywhere cheaper. (If you do, then look very carefully for hidden charges since that registrar will be subsidising your domains)
They've got some pretty useful free tools to help you manage it, and use it effectively too.
(For the Cynical, CF's MD was very open about why they don't charge for domains - it's to get your goodwill. The only restriction is you can't use third party nameservers for domains you host with them for free, you have to use CF's. I've never found that a problem in many years of both private and commercial domain hosting there)