Overlay networks facilitate communication between various resources and systems while maintaining isolation and security. These networks often use virtualization techniques to create logical connections over existing physical infrastructure.
In cloud computing environments, a VPC provides a virtual network infrastructure that allows users to logically isolate resources within the cloud.

• Scalability: Overlay subnets enable seamless scaling of resources across multiple availability zones or regions. As demand for resources grows, users can deploy additional instances or services within the overlay subnet, leveraging the scalability of the cloud provider's infrastructure.
• Traffic Redundancy: Traffic within the overlay subnet can be routed intelligently to ensure redundancy and minimize latency VPC overlay subnets provide a flexible and resilient networking architecture for deploying cloud-based applications and services, offering high availability, scalability, and fault tolerance across distributed environments within the cloud provider's infrastructure.

Choose an appropriate name for the overlay subnet.

Determine the cluster and VPC specifications.

Decide on the prefix for your network, then select the network IP and gateway.

Define the IP pool range for the overlay subnet, excluding the subnet IP within that range.

Save and apply the overlay network configuration to your machines.