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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.
The Cisco Nexus 9000 VXLAN implementation uses the classic Layer 2 data plane flooding and learning mechanisms for remote VTEP discovery and tenant address learning. The network in Figure 4 is an example that shows the learning process.