Hi @ zaheernew
Virtual eXtensible Local Area Network (VXLAN) is one of the Network Virtualization over Layer 3 (NVO3) technologies defined by the Internet Engineering Task Force (IETF) and is an extension to Virtual Local Area Network (VLAN). VXLAN encapsulates a Layer 2 Ethernet frame into a UDP packet and transmits the packet over a Layer 3 network.
VXLAN is essentially a tunneling technology. It establishes a logical tunnel on the IP network between the source and destination network devices to encapsulate user-side packets and forward them through the tunnel. Servers are connected to different ports of network devices in the data center VXLAN network, which can be considered as a virtual Layer 2 switch.
In a nutshell, VXLAN has become the mainstream technology for constructing data center networks because it can meet the requirements of dynamic virtual machine (VM) migration and multi-tenancy in data center networks.

You can refer to https://forum.huawei.com/enterprise/en/vxlan-an-introduction/thread/757963-869
I hope it helps!