Virtual Ethernet Port Aggregator (VEPA) is designed to reduce complexities associated with highly virtualized deployments. VEPA is part of the emerging IEEE 802.1Qbg standardization effort. The VEPA takes all the traffic generated from virtual machines on a server and moves it out to the external network switch. This is accomplished by incorporating a new forwarding mode on the physical switch which allows traffic to hairpin back out the same port it came in on, to facilitate inter-VM communication on the same server.”]
Source: https://www.csoonline.com/article/2126451/vepa–an-answer-to-virtual-switching.html