Overlay refers to a layer built on top of an existing blockchain to enhance its capabilities. This added layer can support new features without altering the main blockchain’s structure. Overlays can facilitate faster transactions, improve scalability, or enable smart contracts and other functions. For example, the Lightning Network is an overlay to Bitcoin that allows for quicker transactions by creating off-chain payment channels.By using overlays, developers can innovate and implement changes without needing to modify the underlying blockchain. This helps maintain stability and security while allowing for flexibility and improved performance.Overlays can also help with interoperability, allowing different blockchains to communicate and work together. This can encourage collaboration and expand the potential uses of blockchain technology. In summary, overlays are essential tools that enhance and empower blockchain networks, enabling further development and functionality.