The main purpose of using extroot is to extend the storage capacity of the device. Pivoting /overlay (or root) gives you the ability to install packages onto a USB storage device.
There is a more detailed overview on how pivot works on the OpenWrt wiki.
Preparing USB Flash Storage
You will need to decide how much space will be used for /overlay and also how many other mount points you want. The easiest way to partition the storage device is to use gparted on a linux system.
I decided to give the overlay plenty of storage, have a small swap partition and use a /data mountpoint for the rest of the device.
/dev/sda1 1.3GB EXT4 /overlay /dev/sda2 524MB SWAP /dev/sda3 5.4GB EXT4 /data
Setting up /overlay Pivot
mkfs.ext4 /dev/sda1 mkfs.ext4 /dev/sda3
mount primary usb partition and copy /overlay to it
mount /dev/sda1 /mnt tar -C /overlay -cvf - . | tar -C /mnt -xf -
generate fstab with UUID's of partitions
block detect > /etc/config/fstab
edit fstab setting mount points + enabling them
copy fstab to the usb stick /overlay
cp /etc/config/fstab /mnt/upper/etc/config/fstab
reboot router & check the partitions are mounted as expected
root@OpenWrt:~# df -h Filesystem Size Used Available Use% Mounted on rootfs 1.3G 6.5M 1.2G 1% / /dev/root 2.5M 2.5M 0 100% /rom tmpfs 29.5M 224.0K 29.3M 1% /tmp /dev/sda1 1.3G 6.5M 1.2G 1% /overlay overlayfs:/overlay 1.3G 6.5M 1.2G 1% / tmpfs 512.0K 0 512.0K 0% /dev /dev/sda3 5.4G 11.2M 5.1G 0% /data
If you don't see /dev/sda1 mounted you might have problems with usb module initialization. Check dmesg output to see when USB is initialized. For more info regarding this see my wnr2200 post.
Below is an example of the mounts in luci.