pgsodium is a Postgres extension that provides an alternative to pgcrypto with encryption functions that wrap the libsodium encryption library. It offers features like multi-layered role-based access to symmetric functions, integration with key management systems, end-to-end encryption with key exchange, and streaming encryption with forward secrecy. It aims to address limitations of pgcrypto like lack of key derivation, public key signing, and missing cryptography functions.