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VXLAN defines a MAC-in-UDP encapsulation scheme where the original Layer 2 frame has a VXLAN header added and is then placed in a UDP-IP packet. With this MAC-in-UDP encapsulation, VXLAN tunnels Layer 2 network over Layer 3 network.
VMware white paper In the following example on a Cisco switch running CatOS, only ports 0/1 and 0/2 are good for VST mode, and ports 0/3, 0/4, and 0/5 do not pass VLAN frames properly to the ESX Server systems.Mware white paper layer 3. They are orthogonal. However, it is common to have a one-to-one relationship between a VLAN and an IP subnet, though this is not required.Q: Does ESX Server support VLANs for non-IP networks?A: Yes. VLAN is a layer 2 technology that works with any layer 3 networks.