OpenNSL API Guide and Reference Manual
Vxlan

Virtual eXtensible LAN(VXLAN) is an IETF draft protocol aimed at enabling multiple L2 virtual networks over a L3 network infrastructure. VXLAN is a new network segmentation, encapsulation and tunneling mechanism built on top of proven network modules such as IP routing and ECMP forwarding.

The primary goal of VXLAN is to extend the virtual LAN (VLAN) address space by adding a 24-bit segment ID and increasing the number of available IDs to 16 million. The VXLAN segment ID in each frame differentiates individual logical networks so millions of isolated Layer 2 VXLAN networks can co-exist on a common Layer 3 infrastructure. As with VLANs, only virtual machines (VMs) within the same logical network can communicate with each other.

VXLAN is a Layer 2 overlay scheme on a Layer 3 network. Each overlay is termed a VXLAN segment. Only VMs within the same VXLAN segment can communicate with each other. Each VXLAN segment is identified through a 24-bit segment ID, termed the "VXLAN Network Identifier (VNI)". This allows up to 16 M VXLAN segments to coexist within the same administrative domain.