Which VXLAN component encapsulates and decapsulates Ethernet frames?

A VTEP (VXLAN Tunnel Endpoint) is the correct answer because it is the device responsible for encapsulating Ethernet frames into UDP packets for transmission across the underlay network and decapsulating them upon arrival at the destination. It acts as the interface between the VXLAN overlay and the IP underlay. VNI (VXLAN Network Identifier) is incorrect because it is a 24-bit identifier that uniquely identifies a VXLAN segment, similar to a VLAN ID, but it does not perform encapsulation. GRE (Generic Routing Encapsulation) is incorrect because while it is an encapsulation protocol, it is not specific to VXLAN and does not provide the same features as VXLAN for large-scale data center virtualization. EVPN (Ethernet VPN) is incorrect because it is a control plane protocol used to distribute MAC address and IP information for VXLAN, but it does not handle the data plane encapsulation itself.