Texture atlas + color overlay or just a larger texture atlas?

Sorry for the vague question.

I am currently building a tile-based level editor for myself and there’s two ways I have been considering when it comes to texturing the world.

  1. The use of a texture atlas that contains all the textures and the necessary color variations (Ex. a plank floor might come in 3 different colors)
  2. The use of a smaller texture atlas that contains only the “model” of a texture (Such as the plank floor from above but only one, color-free version) combined with a separate color overlay texture.

My question: is there any advantages and/or disadvantages in either system when it comes to efficiency? I understand that there are a lot of varying factors so for the sake of the question: the world would be big and consists of many different tiles.

As I see it, the first option could potentially grow into extreme sizes while the latter is more compact but requires an additional texture to give each tile a color.

i would suggest 1 atlas and change the color by code or use cherno solution