Networks and the Internet itself rely on multiple physical and logical resources to work properly. In summary, we can consider that these resources are maintained and provided in the overlay and underlay networks.
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All the physical infrastructure that enables frames and packets to be forwarded from o one point to another → “place” on which it is possible to connect and communicate with networking devices.
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In most cases, the underlay network is hardware orchestrated. Thus, it becomes hard to reorganize the network topology and add new nodes due to the necessity of physically working with network equipment.
Overlay Network
Basically, we can say that overlay networks implement the concept of virtual networks (abstraction of the resources provided by the underlying network). The same physical infrastructure can be employed to build different virtual networks (i.e., creating virtual networks does not demand changing the underlay network).
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There exist multiple protocols employed to do the transportation of data in overlay networks : IPSec: a protocol that secures communications in an overlay network. It enables, for instance, data authentication, confidentiality, and integrity; etc.