sed is the Stream EDitor. It can do a whole pile of really cool things, but the most common is text replacement.
The s,%,$,g part of the command line is the sed command to execute. The s stands for substitute, the , characters are delimiters (other characters can be used; /, : and @ are popular). The % is the pattern to match (here a literal percent sign) and the $ is the second pattern to match (here a literal dollar sign). The g at the end means to globally replace on each line (otherwise it would only update the first match).
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