Question

what is the nsx component that performs the l2 over l3 encapsulation and has become the ???de-facto??? standard

Answer 1

NSX Edge is the network edge security as well as the gateway services for isolating virtualized network.

Installing the NSX Edge on logical (distributed) router and services gateway is more easier.

The NSX Edge logical router provides the East-West distributed routing having the tenant IP address space with data path isolation.

The Virtual machines or the workloads reside on same host as different subnets to communicate with other.

Answer 2

Virtual Machines

Hope this will help u