Envoy provides various service mesh capabilities such as dynamic real-time out of band configuration without the need to restart it. It also supports listeners, filters, L3/L4 filters, HTTP L7 routing, TCP proxy, support for HTTP 1.1 and HTTP/2 protocol, connection pooling, load balancing, priority request routing, observability, RBAC, rate limiting, and traffic shifting/splitting, all of which is managed through a chain of filters for Envoy connection handling. 

The following diagram is of the capability/architecture matrix of Envoy:

In the preceding diagram, we can see Envoy's proxy features, which are leveraged with the proper configuration in Istio. For example, Envoy is a powerful lightweight proxy engine, and Istio has more than 8,000 lines of code for its configuration. Istio hides that complexity from the end user to provide out-of-the-box solutions so that they can use a sidecar proxy with each microservice.