P2P systems based on Distributed hash table (DHT) such as CAN, Chord, Pastry, and Tapestry, use uniform hash functions to ensure load balance in each participant nodes. But the evenly distributed behavior in the virtual space destroys the locality between participant nodes. The topology-based hierarchical overlay network like Grapes, exploits the physical distance information among the nodes to construct a two-layered hierarchy, highly improves the locality, but damages the load balance property in original DHTs. In this paper, we propose a dynamic P2P overlay infrastructure, called Jelly. It can achieve both the load balancing and locality properties. Its design is based on the hierarchical overlay and uses the DHT as its routing algorithm. Because the load balancing issue in a hierarchical overlay is originated from whether the virtual hierarchy is balanced or not, Jelly uses a node joining mechanism as a fine-tuning tool and a dynamic checking mechanism as a coarse-tuning tool to balance the hierarchy. We also find that the average routing hops is a practical metric to evaluate the network size, and it is useful for Jelly?s dynamic mechanism.