If we need to create more than one GRE tunnel interface then we use MGRE tunnel interface instead of point to point GRE interface

MGRE is a combination of NHRP & GRE

Why we need NHRP?

NHRP is an Address Resolution Protocol (ARP)-like protocol that dynamically maps nonbroadcast multiaccess (NBMA) Network. With NHRP, systems attached to an NBMA network can dynamically learn the NBMA (physical) address of the other systems that are part of that network, allowing these systems to directly communicate.

1.  NHRP is an ARP-like protocol that allows Next Hop Clients (NHCs ) to dynamically register with Next Hop Servers (NHSs). This allows the NHCs to join the NBMA network without configuration changes on the NHSs

2.  NHRP is a resolution protocol that allows one NHC client (spoke) to dynamically discover the logical VPN IP to physical NBMA IP mapping for another NHC client (spoke) within the same NBMA network. Without this discovery, IP packets traversing from hosts behind one spoke to hosts behind another spoke would have to traverse by way of the NHS (hub) router. This would increase the utilization of the hub’s physical bandwidth and CPU to process these packets that come into the hub on the multipoint interface and go right back out the multipoint interface. This is often called hair-pinning. With NHRP, systems attached to an NBMA network dynamically learn the NBMA address of the other systems that are part of that network, allowing these systems to directly communicate without requiring traffic to use an intermediate hop.

3. NHRP is a client/server protocol in which clients are said to be spokes & servers as hub

4. Each spokes registers itself with hub by providing its real (NBMA/Physical) address with tunnel (Logical) address

5. So hub will dynamically learn about the spokes & form a GRE tunnel with them.

The last new command, ip nhrp map multicast dynamic, allows NHRP to automatically add spoke routers to the multicast NHRP mappings when these spoke routers initiate the mGRE+IPsec tunnel and register their unicast NHRP mappings. This is needed to enable dynamic routing protocols to work over the mGRE+IPsec tunnels between the hub and spokes. If this command was not available, then the hub router would need to have a separate configuration line for a multicast mapping to each spoke.