For the law was given through Moses; grace and truth came through Jesus Christ.
The primary purpose of Moses’ Law was to reveal sin and guilt and thus, was not gracious (Rom. 7.7). The aspect of truth to which John refers in our verse speaks to the fulfillment of all the mere figures presented in Moses’ sacrificial system.
Previously in 1.14, John describes how the preexisting logos took upon Himself flesh and dwelt among us. The word “dwelt” is eskaynosin which some translators have rendered “tabernacled.” The root is “tent” and refers to residing in this type of structure. This hearkens back to the Jewish Tabernacle first established during the “wilderness wanderings.” Therefore, John identifies Jesus’ 1st century incarnation as an true ideal, contra to how God dwelt in the midst of Israel during the time of Moses. What was only figurative in the wilderness, Jesus now fulfills in reality and truth.
Also, Jesus was the better Jewish High Priest who ministered in heaven for us instead of in the copy and shadow on earth (Heb. 8.4-5). Jesus established the New Covenant in which a relationship is formed (Jn. 1.12-13) whereas the Mosaic one made nothing perfect (Heb. 8.7-12). The variety of sacrifices enumerated by Moses greatly expanded the ancient animal sacrifices first pictured in the Garden of Eden (when God clothed the naked pair with animal skins). Most of the Mosaic offerings foretold some aspect fulfilled by Christ’s sacrifice and thus, His was the ultimate and true offering (Heb. 10.8-10).