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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.
To accurately deliver traffic on a trunk port with multiple VLANs, the device makes use of tagging, or the IEEE 802.1Q encapsulation method. In this method, a is tag inserted within the frame header. This tag carries details regarding the particular VLAN to which the packet and frame belong.