In a VXLAN deployment, what is the primary function of a VXLAN Tunnel Endpoint (VTEP)?

A VXLAN Tunnel Endpoint (VTEP) is a network device, often a switch or router, responsible for encapsulating Ethernet frames into UDP packets for transmission across an IP underlay network, and decapsulating them at the destination. This process allows Layer 2 segments to be extended over a Layer 3 network. The VTEP acts as the interface between the traditional Layer 2 network and the VXLAN overlay. Option B is incorrect because a 24-bit segment ID defines the VXLAN Network Identifier (VNI), not the VTEP itself. Option C is incorrect because while encapsulation and decapsulation occur at a logical interface on the VTEP, the VTEP itself is the device performing the overall function, not just the interface. Option D is incorrect because VXLAN uses UDP for tunneling, not GRE.