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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.
Cisco Nexus 9000 Series Switches implement VXLAN in the way that a hash of the inner frameâs header is used as the VXLAN source UDP port. As a result, a VXLAN flow can be unique, with the IP addresses and UDP ports combination in its outer header while traversing the underlay transport network.