Multiple overlay network encapsulations are nothing more than a major inconvenience (and religious wars based on individual bit fields close to meaningless) for anyone trying to support more than one overlay virtual networking technology (just ask F5 or Arista).
The key differentiator between scalable and not-so-very-scalable architectures and technologies is the control plane – the mechanism that maps (at the very minimum) remote VM MAC address into a transport network IP address of the target hypervisor (see A Day in a Life of an Overlaid Virtual Packet for more details).
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