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CCNP Infrastructure Practice Question

A network engineer is configuring VXLAN on a Cisco Nexus 9000 series switch. The underlay network is a routed Layer 3 network using OSPF. The engineer needs to ensure that the VXLAN tunnel endpoint (VTEP) IP addresses are reachable across the underlay. Which statement describes the correct configuration for the VTEP source interface?

⚠ Common exam trap

The trap here is assuming that any interface with an IP address can serve as the VTEP source, but the best practice is to use a loopback for stability and redundancy.

Answer choices

Why each option matters

Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.

Correct answer & explanation

✓

The VTEP source interface must be a loopback interface with an IP address advertised into the underlay routing protocol.

For VXLAN, the VTEP source interface should be a loopback interface with an IP address advertised into the underlay routing protocol. This ensures that the VTEP IP remains reachable even if a physical link fails, providing redundancy. The underlay network must route the loopback IP so that remote VTEPs can establish VXLAN tunnels.

Answer analysis

Option-by-option breakdown

For each option: why learners choose it and why it is or isn't the right answer here.

  • ✗

    The VTEP source interface must be a VLAN interface (SVI) on the switch, and the VLAN must be allowed on all trunk links.

    Why it's wrong here

    An SVI is used for Layer 2 VLANs, not for VTEP source in a routed underlay. VXLAN requires an IP address on a loopback or physical interface that participates in the underlay routing. Using an SVI would complicate the design and is not standard for VXLAN VTEPs.

  • ✓

    The VTEP source interface must be a loopback interface with an IP address advertised into the underlay routing protocol.

    Why this is correct

    Using a loopback interface as the VTEP source ensures high availability because it remains up as long as any path to the underlay exists. Advertising the loopback IP into OSPF makes it reachable by remote VTEPs, enabling VXLAN tunnels to form. This is the recommended design for VXLAN in Cisco Nexus environments.

  • ✗

    The VTEP source interface must be a subinterface configured with 802.1Q encapsulation.

    Why it's wrong here

    Subinterfaces with 802.1Q are used for VLAN trunking on a router-on-a-stick configuration, not for VXLAN VTEP source. VXLAN requires a routable IP address, typically on a loopback. Using a subinterface would not provide the necessary reachability or redundancy for the underlay.

  • ✗

    The VTEP source interface must be a physical interface that is directly connected to the underlay network.

    Why it's wrong here

    A physical interface can be used, but it is not the recommended practice because if that interface fails, the VTEP becomes unreachable even if other paths exist. Loopback interfaces provide redundancy and stability. Using a physical interface would not satisfy the requirement for a resilient underlay.

Visual reference

R1 R2 R3 R4 10 100 10 100 OSPF picks R1→R2→R4 (cost 20) over R1→R3→R4 (cost 200)

Quick reference

Routing Protocol Comparison

ProtocolMetricMax HopsAlgorithmType
RIP v2Hop count15Bellman-FordDistance vector
OSPFCost (bandwidth)UnlimitedDijkstra (SPF)Link state
EIGRPComposite metricUnlimitedDUALHybrid
IS-ISCostUnlimitedDijkstraLink state
BGPPolicy / attributesUnlimitedPath vectorPath vector

RIP's 15-hop limit makes it unsuitable for large networks. OSPF and EIGRP dominate modern enterprise deployments.

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Written and reviewed by Johnson Ajibi, MSc IT Security

Senior Network & Security Engineer · founder of Courseiva

Last reviewed September 2026 · checked against the official Cisco exam blueprint

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