The Swarm Overlay Index is designed to accommodate massive scale in an object store cluster due to its following characteristics:
Reduction of multicast traffic necessary to locate an object in the cluster (especially in large clusters)
Optimized code paths that dramatically improve multicast scale and performance where it's needed
Reduced CPU load
Faster trimming of temporary replication overhead during failure recovery
Speaking generically, the Overlay Index will attempt to enable itself when Swarm 7 and higher is managing a cluster of at least 32 node processes (the default).
Although the features Overlay Index provides are highly desirable in large clusters, they do incur a cost in an increased need for physical memory. Fortunately, the Overlay Index implementation is intelligent enough to determine whether or not there is enough memory available to enable itself. If you find yourself in a situation where you're not entirely sure if you can leverage Overlay Index, or you're concerned that it may take up too much memory resource in the course of upgrading from an older version, it's helpful to remember this fact. Effectively, Overlay Index will come into play if it determines it has the resources to do so, which makes overall cluster planning simpler.