This is a technique called serger lace that I read about some time ago. My old serger was not capable of doing this pretty intricate edging. This is fun to do and looks delicate and pretty on the edge of fabric.
Making serger lace with rainbow colors is fun and decorative for fancy fabrics. I can't wait to try it on something other than white cotton fabric which I used here. It took me a few tries to get the hang of this but the end result is colorful and fun. I look forward to trying it with some bulky/woolly nylon or pearl crown thread.