What are tunnel zones?

A tunnel zone is an isolation zone for hosts.

Physical hosts in the same tunnel zone, communicate directly with one another, without a need to use a tunnel. MidoNet supports two types of tunnel zones for separating physical hosts in the underlay, GRE (default) and VXLAN.

A third type of a tunnel zone, VTEP, is used for connecting MidoNet hosts to a hardware VTEP. Whereas, a MidoNet host may only belong to one tunnel zone, type GRE or VXLAN, it may belong to two different tunnel zones if one of them is of GRE/VXLAN type and the other one of VTEP type. In fact, this configuration is required to successfully connect a MidoNet host to a hardware VTEP. For more information, see "VXLAN configuration" section in the "MidoNet Operations Guide".

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