Integration of Neutron L2 GW to OSP:
https://wiki.openstack.org/wiki/Neutron/L2-GW

Our use case for L2 GW is to use VxLAN overlay for external connections instead of VLANs. This is achieved by having Neutron to manage VxLAN tunnel endpoints (VTEPs) on the physical switches as well as on the virtual switches on the hosts.

Discovering correct VTEP for destination MAC could be done with multicast, however Open vSwitch does not support this. Other way would be to have SDN controller with some application managing the VTEPs, but such applications are not generally available at the moment. Also L2 networks could be tunneled over L3 in a datacenter by configuring VTEPs on the leaf switches. This is however static and complex without SDN.

To have VXLAN overlay all the way from hosts to the edge of the cloud without multicasts or SDN, Neutron needs to have mapping of physical VTEPs in addition to host VTEPs with vSwitches. Neutron L2 GW implements this funtionality using OVSDB to configure VTEPs on the physical switches supporting it.

Use case somewhat similar to ours is demoed in this video:
https://www.youtube.com/watch?v=OJx2qKQijZ4