Reference Signal: ... Orange trace is a combination of waves rather than showing just one regular sine wave.
Modulation Wave: ... Green trace is a fixed frequency sawtooth wave. (Triangle could be used instead).
The whole orange Reference Signal peak to peak is kept within the confines of the green Modulation Wave sawtooth peak to peak, so that every crossing of the signal above/below the sawtooth is detected.
The green sawtooth Modulation Wave frequency needs to be a lot higher than the Reference Signal frequency.
That on/off is output as a high/low square wave (blue trace): hence PWM
There are quite a few different ways to Modulate a signal. Here is another way:
A different variation can be seen if you flick the switch. Here, the Modulation Wave is now just a d.c. straight line instead of being a sawtooth.
Use the pot to alter the voltage height of that green Modulation line, up or down to 'trigger' the PWM. The width of the blue output square wave will alter accordingly, depending on how much of the signal is detected.
That broadcast PWM square wave would then be demodulated at the receiver, to obtain a replica of the original Reference Signal orange trace input.
