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Layer 2 VPN is a type of VPN mode that is built and delivered on OSI layer 2 networking technologies.
The entire communication from the core VPN infrastructure is forwarded in a layer 2 format on a layer 3/IP network and is converted back to layer 2 mode at the receiving end.
Layer 2 VPN typically utilizes MPLS-based labels to send data to layer 3 or network edge routers from the are transmission site to the destination node. The edge router selects the appropriate path and transmits the data in a layer 3 or IP packet form. If the destination VPN infrastructure utilizes layer 2 technologies, the data is converted back to layer mode. However, if it utilizes layer 3 mode, there is no need for conversion. Layer 2 VPN is typically used by VPN service providers or ISPs that utilize layer 2 networking technologies within their core infrastructure. These technologies include ATM, frame relay and others.