Disadvantages
Disadvantage of Proxy ARP include scalability (ARP resolution is required for every device routed in this manner) and reliability (no fallback mechanism is present, and masquerading can be confusing in some environments). ARP manipulation techniques, however, are the basis for protocols providing redundancy on broadcast networks (e.g., Ethernet), most notably CARP and Virtual Router Redundancy Protocol.
Proxy ARP can create DoS attacks on networks if misconfigured. For example a misconfigured router with proxy ARP has the ability to receive packets destined for other hosts (as it gives its own MAC address in response to ARP requests for other hosts/routers), but may not have the ability to correctly forward these packets on to their final destination, thus blackholing the traffic.
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