Peer routing enables one VLT node to act as a proxy gateway for the other peer in a VLT domain. When you enable routing on VLT peers, you can also enable the peer routing feature.
The following figure shows how a packet is routed when peer routing is not enabled. Due to the hashing algorithm in the port channel, a packet from a host is sent to either of the VLT port-channel members. If a packet is sent to Peer-1 which is not the destined gateway for the hosts under the ToR Switch, the packet is switched to the destined VLT peer (Peer-2) using the VLTi link. Peer-2 then routes the packet to its destination.
If you enable peer routing, a VLT node acts as a proxy gateway for its connected VLT peer as shown in the image below. Even though the gateway address of the packet is different, Peer-1 routes the packet to its destination on behalf of Peer-2 to avoid sub-optimal routing.
With peer routing, you need not configure VRRP for the participating VLANs. As both VLT nodes act as a gateway for its peer, irrespective of the gateway IP address, the traffic flows upstream without any latency. There is no limitation for the number of VLANS.
