Answer
VXLAN encapsulation adds overhead and packets may cross nodes, increasing RTT and CPU cost.
Quick Answer
Overlay networking adds VXLAN encapsulation: each packet gets wrapped in a UDP/VXLAN header (50+ bytes of overhead), processed by the kernel's VXLAN driver, and decapsulated on the other end. This is 2-3 extra kernel operations per packet vs direct bridge networking. At high packet rates, this latency adds up.
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SugharaIQ Editorial Team
Verified Answer
This answer has been peer-reviewed by industry experts holding senior engineering roles to ensure technical accuracy and relevance for modern interview standards.
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Source: SugharaIQ