The answer is that VXLAN supports up to 16 million logical networks. This is correct because VXLAN uses a 24-bit segment ID, known as the VNI (VXLAN Network Identifier), which provides 2^24—over 16 million—unique Layer 2 segments, far exceeding the 4096 VLAN limit. By encapsulating Layer 2 frames in UDP packets over IP, VXLAN enables Layer 2 extension across Layer 3 boundaries, allowing virtual machine mobility and multi-tenant isolation without physical network constraints. On the ENCOR 350-401 exam, this question tests your understanding of network virtualization scalability; a common trap is confusing VXLAN’s 16-million network capacity with the 4096 VLAN limit or assuming VXLAN eliminates the need for IP routing. Remember the mnemonic: “VXLAN’s 24-bit VNI = 16 million networks, VLAN’s 12-bit ID = 4096.”
CCNP Virtualization Practice Question
This 350-401 practice question tests your understanding of virtualization. Match the stated requirement to the specific cloud service, access model, or configuration option — many options are valid in isolation but not for this scenario. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
Which TWO of the following are benefits of using network virtualization with VXLAN? (Choose two.)
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Enables Layer 2 extension across Layer 3 boundaries.
VXLAN encapsulates Layer 2 frames in UDP packets over IP, allowing Layer 2 segments to be stretched across Layer 3 networks. This enables virtual machine mobility and multi-tenant environments without being constrained by physical network boundaries.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
✓
Enables Layer 2 extension across Layer 3 boundaries.
Why this is correct
VXLAN tunnels Layer 2 over Layer 3.
Related concept
Read the scenario before looking for a memorised answer.
✗
Eliminates the need for STP by using a centralized controller.
Why it's wrong here
VXLAN doesn't require STP but does not use a controller.
Read the scenario before looking for a memorised answer.
✗
Provides native encryption for data in transit.
Why it's wrong here
VXLAN does not encrypt; it can be combined with IPsec.
Common exam traps
Common exam trap: answer the scenario, not the keyword
Cisco often tests the misconception that VXLAN eliminates STP or provides native encryption, but VXLAN is an overlay technology that still relies on the underlay network's STP and does not include encryption by default.
Detailed technical explanation
How to think about this question
VXLAN uses a 24-bit VNI (Virtual Network Identifier) to support up to 16 million logical networks, far exceeding the 4096 VLAN limit. In modern deployments, BGP EVPN is often used as the control plane to distribute MAC/VTEP reachability, reducing reliance on multicast flooding and improving scalability.
KKey Concepts to Remember
Read the scenario before looking for a memorised answer.
Find the constraint that changes the correct option.
Eliminate answers that are true in general but not in this case.
TExam Day Tips
→Watch for words such as best, first, most likely and least administrative effort.
→Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A small business has 20 workstations on the 192.168.1.0/24 network and one public IP from its ISP. The router uses PAT (NAT overload) so all 20 devices share one public address using different source ports. NAT questions test whether you understand the four address terms and which direction each translation applies.
What to study next
Got this wrong? Here's your next step.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Virtualization — This question tests Virtualization — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Enables Layer 2 extension across Layer 3 boundaries. — VXLAN encapsulates Layer 2 frames in UDP packets over IP, allowing Layer 2 segments to be stretched across Layer 3 networks. This enables virtual machine mobility and multi-tenant environments without being constrained by physical network boundaries.
What should I do if I get this 350-401 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
About these practice questions
Courseiva creates original exam-style practice questions with explanations and wrong-answer analysis. It does not publish real exam questions, exam dumps, or protected exam content. Learn why practice questions differ from exam dumps →
Share a tip, memory trick, or ask about the reasoning behind this question. Do not post real exam questions, leaked content, braindumps, or copyrighted exam material. Comments are moderated and may be removed without notice.
This 350-401 practice question is part of Courseiva's free Cisco certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the 350-401 exam.
Question Discussion
Share a tip, memory trick, or ask about the reasoning behind this question. Do not post real exam questions, leaked content, braindumps, or copyrighted exam material. Comments are moderated and may be removed without notice.
Sign in to join the discussion.