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

Format partitions

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

vim /etc/config/fstab

copy fstab to the usb stick /overlay

cp /etc/config/fstab /mnt/upper/etc/config/fstab

unmount device

umount /mnt

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.