diff --git a/.reuse/dep5 b/.reuse/dep5
index 745600e60..5e251ba97 100644
--- a/.reuse/dep5
+++ b/.reuse/dep5
@@ -14,6 +14,7 @@ Files:
   Dockerfile
   config/*
   hack/*
+  test/benchmark_test/config_templates/*
   *.json
   *meson.build
   proto/dpdk.proto
diff --git a/docs/deployment/help_dpservice-bin.md b/docs/deployment/help_dpservice-bin.md
index bceb7a451..b28e0ade0 100644
--- a/docs/deployment/help_dpservice-bin.md
+++ b/docs/deployment/help_dpservice-bin.md
@@ -7,6 +7,7 @@
 | --pf0 | IFNAME | first physical interface (e.g. eth0) |  |
 | --pf1 | IFNAME | second physical interface (e.g. eth1) |  |
 | --pf1-proxy | IFNAME | VF representor to use as a proxy for pf1 packets |  |
+| --pf1-proxy-vf | IFNAME | VF interface of the pf1-proxy VF representor |  |
 | --ipv6 | ADDR6 | IPv6 underlay address |  |
 | --vf-pattern | PATTERN | virtual interface name pattern (e.g. 'eth1vf') |  |
 | --dhcp-mtu | SIZE | set the mtu field in DHCP responses (68 - 1500) |  |
diff --git a/docs/deployment/mellanox.md b/docs/deployment/mellanox.md
index c7214cf7a..2c6103360 100644
--- a/docs/deployment/mellanox.md
+++ b/docs/deployment/mellanox.md
@@ -46,3 +46,6 @@ In some cases (looks like a nic/switch combination) performance is severly affec
 
 ## Dp-service setup
 Either `prepare.sh` script or `preparedp.service` systemd unit needs to be run before dp-service can work properly. This should already be done automatically if using the Docker image provided. Make sure this does not produce any errors.
+
+### Multiport-eswitch
+The `prepare.sh` script supports `--multiport-eswitch` argument to set the card up in multiport-eswitch mode. There is an additional `--pf1-proxy` argument to also create a VF on PF1 for proxying PF1 traffic. Currently both arguments are needed to properly run dpservice in multiport-eswitch mode due to a (suspected) driver bug.
diff --git a/docs/development/running.md b/docs/development/running.md
index 8f938e86d..69b976b28 100644
--- a/docs/development/running.md
+++ b/docs/development/running.md
@@ -74,3 +74,16 @@ Without the help of scripts or config files, you can run the service directly (a
 `--vf_pattern` defines the prefix used by the virtual functions created by the smartnic and which need to be controlled by dp-service. These interfaces are then to be used by running VMs.
 
 `--ipv6` sets the underlay IPv6 address which should be used by dp-service for ingress/egress packets coming to/leaving the smartnic.
+
+#### Multiport-eswitch
+In this mode, only the PF0 (which is bonded with PF1) needs to be specified:
+```bash
+./dpservice-bin -a 0000:03:00.0,class=rxq_cqe_comp_en=0,rx_vec_en=1,dv_flow_en=2,dv_esw_en=1,fdb_def_rule_en=1,representor=pf[0-1]vf[0-5] -l 0,1 -- --pf0=enp59s0f1 --pf1=enp59s0f1 --vf-pattern=enp59s0f0_ --ipv6=2a10:afc0:e01f:209:: --no-stats --no-offload --multiport-eswitch
+```
+
+#### PF1-proxy
+In multiport-eswitch mode, currently PF1 is not usable (suspected driver problem), so dpservice provides a way to proxy the communication over a separate VF on PF1.
+```bash
+./dpservice-bin -a 0000:03:00.0,class=rxq_cqe_comp_en=0,rx_vec_en=1,dv_flow_en=2,dv_esw_en=1,fdb_def_rule_en=1,representor=pf[0-1]vf[0-5] -l 0,1 -- --pf0=enp59s0f1 --pf1=enp59s0f1 --vf-pattern=enp59s0f0_ --ipv6=2a10:afc0:e01f:209:: --no-stats --no-offload --multiport-eswitch --pf1-proxy enp59s0f1npf1vf0 --pf1-proxy-vf enp59s0f1v0
+```
+The `--pf1-proxy` is the representor used by dpservice for proxying packets. The `--pf1-proxy-vf` is the VF used by the Linux kernel to receive packets, i.e. the replacement for PF1. Without `--pf1-proxy-vf` dpservice is unable to determine the MAC address to use for host-host overlay traffic.
diff --git a/hack/dp_conf.json b/hack/dp_conf.json
index d89582c63..75387ee4d 100644
--- a/hack/dp_conf.json
+++ b/hack/dp_conf.json
@@ -28,6 +28,15 @@
       "array_size": "IF_NAMESIZE",
       "ifdef": "ENABLE_PF1_PROXY"
     },
+    {
+      "lgopt": "pf1-proxy-vf",
+      "arg": "IFNAME",
+      "help": "VF interface of the pf1-proxy VF representor",
+      "var": "pf1_proxy_vf",
+      "type": "char",
+      "array_size": "IF_NAMESIZE",
+      "ifdef": "ENABLE_PF1_PROXY"
+    },
     {
       "lgopt": "ipv6",
       "arg": "ADDR6",
diff --git a/hack/prepare.sh b/hack/prepare.sh
index 4dc64f1e4..54bf807b1 100755
--- a/hack/prepare.sh
+++ b/hack/prepare.sh
@@ -13,7 +13,8 @@ OPT_MULTIPORT=false
 OPT_PF1_PROXY=false
 
 BLUEFIELD_IDENTIFIERS=("MT_0000000543", "MT_0000000541")
-NUMVFS=126
+MAX_NUMVFS_POSSIBLE=126
+NUMVFS_DESIRED=126
 CONFIG="/tmp/dp_service.conf"
 IS_X86_WITH_BLUEFIELD=false
 IS_ARM_WITH_BLUEFIELD=false
@@ -143,8 +144,12 @@ function create_vf() {
 	local pf0="${devs[0]}"
 	local pf1="${devs[1]}"
 
+	if [[ "$OPT_MULTIPORT" == "true" && "$NUMVFS_DESIRED" -eq "$MAX_NUMVFS_POSSIBLE" ]]; then
+		NUMVFS_DESIRED=$((NUMVFS_DESIRED - 1))
+	fi
+
 	if [[ "$IS_ARM_WITH_BLUEFIELD" == "true" ]]; then
-		actualvfs=$NUMVFS
+		actualvfs=$NUMVFS_DESIRED
 		log "Skipping VF creation for BlueField card on ARM"
 		# enable switchdev mode, this operation takes most time
 		process_switchdev_mode "$pf0"
@@ -185,7 +190,7 @@ function create_vf() {
 
 	# calculating amount of VFs to create, 126 if more are available, or maximum available
 	totalvfs=$(cat /sys/bus/pci/devices/$pf0/sriov_totalvfs)
-	actualvfs=$((NUMVFS<totalvfs ? NUMVFS : totalvfs))
+	actualvfs=$((NUMVFS_DESIRED<totalvfs ? NUMVFS_DESIRED : totalvfs))
 	log "creating $actualvfs virtual functions"
 	echo $actualvfs > /sys/bus/pci/devices/$pf0/sriov_numvfs
 	if [[ "$OPT_PF1_PROXY" == "true" ]]; then
@@ -246,9 +251,10 @@ function get_ipv6() {
 	while read -r l1; do
 		if [ "$l1" != "::1/128" ]; then
 			echo ${l1%/*}
-			break
+			return
 		fi
 	done < <(ip -6 -o addr show lo | awk '{print $4}')
+	err "no ipv6 found"
 }
 
 function make_config() {
@@ -257,16 +263,27 @@ function make_config() {
 		return
 	fi
 
+	# To make error propagation work, need to assign separately
+	conf_pf0="$(get_ifname 0)"
+	conf_pf1="$(get_ifname 1)"
+	conf_vf_pattern="$(get_pattern ${devs[0]})"
+	conf_ipv6="$(get_ipv6)"
+	if [[ "$OPT_MULTIPORT" == "true" ]]; then
+		conf_pf1_proxy="$(get_pf1_proxy ${devs[1]})"
+		conf_pf1_proxy_vf="$(get_pf1_proxy_vf)"
+	fi
+
 	{ echo "# This has been generated by prepare.sh"
 	echo "no-stats"
-	echo "pf0 $(get_ifname 0)"
-	echo "pf1 $(get_ifname 1)"
-	echo "vf-pattern $(get_pattern ${devs[0]})"
-	echo "ipv6 $(get_ipv6)"
+	echo "pf0 $conf_pf0"
+	echo "pf1 $conf_pf1"
+	echo "vf-pattern $conf_vf_pattern"
+	echo "ipv6 $conf_ipv6"
 	if [[ "$OPT_MULTIPORT" == "true" ]]; then
 		echo "a-pf0 ${devs[0]},class=rxq_cqe_comp_en=0,rx_vec_en=1,dv_flow_en=2,dv_esw_en=1,fdb_def_rule_en=1,representor=pf[0-1]vf[0-$[$actualvfs-1]]"
 		if [[ "$OPT_PF1_PROXY" == "true" ]]; then
-			echo "pf1-proxy $(get_pf1_proxy ${devs[1]})"
+			echo "pf1-proxy $conf_pf1_proxy"
+			echo "pf1-proxy-vf $conf_pf1_proxy_vf"
 		fi
 		echo "multiport-eswitch"
 	else
@@ -277,7 +294,7 @@ function make_config() {
 	if [[ "$OPT_MULTIPORT" == "true" ]]; then
 		log "dpservice configured in multiport-eswitch mode"
 		if [[ "$OPT_PF1_PROXY" == "true" ]]; then
-			log "dpservice will create a PF1-proxy"
+			log "dpservice will create a pf1-proxy"
 		fi
 	else
 		log "dpservice configured in normal mode"
diff --git a/include/dp_conf_opts.h b/include/dp_conf_opts.h
index c3e8b0a87..a7c0b2dd1 100644
--- a/include/dp_conf_opts.h
+++ b/include/dp_conf_opts.h
@@ -30,6 +30,9 @@ const char *dp_conf_get_pf1_name(void);
 #ifdef ENABLE_PF1_PROXY
 const char *dp_conf_get_pf1_proxy(void);
 #endif
+#ifdef ENABLE_PF1_PROXY
+const char *dp_conf_get_pf1_proxy_vf(void);
+#endif
 const char *dp_conf_get_vf_pattern(void);
 int dp_conf_get_dhcp_mtu(void);
 int dp_conf_get_wcmp_perc(void);
diff --git a/include/dp_log.h b/include/dp_log.h
index d596dc2ec..bf73ed725 100644
--- a/include/dp_log.h
+++ b/include/dp_log.h
@@ -53,6 +53,7 @@ extern "C" {
 #define DP_LOG_IFNAME(VALUE) _DP_LOG_STR("interface_name", VALUE)
 #define DP_LOG_LCORE(VALUE) _DP_LOG_UINT("lcore_id", VALUE)
 #define DP_LOG_RTE_GROUP(VALUE) _DP_LOG_UINT("rte_group", VALUE)
+#define DP_LOG_LINKSTATE(VALUE) _DP_LOG_STR("link_state", (VALUE) ? "up" : "down")
 // networking stack
 #define DP_LOG_IPV4(VALUE) _DP_LOG_IPV4("ipv4", VALUE)
 #define DP_LOG_IPV6(VALUE) _DP_LOG_IPV6("ipv6", VALUE)
diff --git a/include/dp_netlink.h b/include/dp_netlink.h
index e731be7c0..39e9a689e 100644
--- a/include/dp_netlink.h
+++ b/include/dp_netlink.h
@@ -4,6 +4,7 @@
 #ifndef __INCLUDE_DP_NETLINK_H__
 #define __INCLUDE_DP_NETLINK_H__
 
+#include <stdint.h>
 #include <linux/netlink.h>
 #include <linux/rtnetlink.h>
 
@@ -25,7 +26,7 @@ struct dp_nlnk_req {
 	struct dp_nl_tlv if_tlv;
 };
 
-int dp_get_pf_neigh_mac(int if_idx, struct rte_ether_addr *neigh, const struct rte_ether_addr *own_mac);
+int dp_get_pf_neigh_mac(uint32_t if_idx, struct rte_ether_addr *neigh, const struct rte_ether_addr *own_mac);
 
 #ifdef __cplusplus
 }
diff --git a/include/dp_port.h b/include/dp_port.h
index 464d49a7b..74886899e 100644
--- a/include/dp_port.h
+++ b/include/dp_port.h
@@ -7,8 +7,9 @@
 #include <stdint.h>
 #include <stdbool.h>
 #include <net/if.h>
-#include <rte_pci.h>
 #include <rte_meter.h>
+#include <rte_pci.h>
+#include <rte_timer.h>
 #include "dp_conf.h"
 #include "dp_firewall.h"
 #include "dp_internal_stats.h"
@@ -89,6 +90,7 @@ struct dp_port {
 	char							dev_name[RTE_ETH_NAME_MAX_LEN];
 	uint8_t							peer_pf_hairpin_tx_rx_queue_offset;
 	uint16_t						peer_pf_port_id;
+	uint32_t						if_index;
 	struct rte_ether_addr			own_mac;
 	struct rte_ether_addr			neigh_mac;
 	struct dp_port_iface			iface;
@@ -106,6 +108,8 @@ struct dp_port {
 			struct rte_flow					*default_flows[DP_PORT_ASYNC_FLOW_COUNT];
 		} default_async_rules;
 	};
+	struct rte_timer				neighmac_timer;
+	uint8_t							neighmac_period;
 };
 
 struct dp_ports {
@@ -129,11 +133,16 @@ void dp_ports_stop(void);
 void dp_ports_free(void);
 
 int dp_start_port(struct dp_port *port);
+int dp_start_pf_port(uint16_t index);
 #ifdef ENABLE_PF1_PROXY
 int dp_start_pf1_proxy_port(void);
 #endif
 int dp_stop_port(struct dp_port *port);
 
+void dp_start_acquiring_neigh_mac(struct dp_port *port);
+void dp_stop_acquiring_neigh_mac(struct dp_port *port);
+int dp_set_neigh_mac(uint16_t port_id, const struct rte_ether_addr *mac);
+
 int dp_port_meter_config(struct dp_port *port, uint64_t total_flow_rate_cap, uint64_t public_flow_rate_cap);
 
 static __rte_always_inline
diff --git a/include/monitoring/dp_event.h b/include/monitoring/dp_event.h
index 76367b07d..8f39da2d6 100644
--- a/include/monitoring/dp_event.h
+++ b/include/monitoring/dp_event.h
@@ -11,6 +11,7 @@ extern "C" {
 #include <stdint.h>
 #include <rte_mbuf.h>
 #include <rte_ethdev.h>
+#include <rte_ether.h>
 
 int dp_link_status_change_event_callback(uint16_t port_id,
 										 enum rte_eth_event_type type,
@@ -19,9 +20,11 @@ int dp_link_status_change_event_callback(uint16_t port_id,
 void dp_process_event_link_msg(struct rte_mbuf *m);
 
 int dp_send_event_flow_aging_msg(void);
-
 void dp_process_event_flow_aging_msg(struct rte_mbuf *m);
 
+int dp_send_event_neighmac_msg(uint16_t port_id, struct rte_ether_addr *neighmac);
+void dp_process_event_neighmac_msg(struct rte_mbuf *m);
+
 #ifdef __cplusplus
 }
 #endif
diff --git a/include/monitoring/dp_monitoring.h b/include/monitoring/dp_monitoring.h
index 36af9b452..68691cf3e 100644
--- a/include/monitoring/dp_monitoring.h
+++ b/include/monitoring/dp_monitoring.h
@@ -5,6 +5,7 @@
 #define __INCLUDE_DP_MONITORING_H__
 
 #include <stdint.h>
+#include <rte_ether.h>
 #include <rte_mbuf.h>
 #include "dp_ipaddr.h"
 
@@ -17,6 +18,7 @@ extern "C" {
 enum dp_event_type {
 	DP_EVENT_TYPE_LINK_STATUS,
 	DP_EVENT_TYPE_FLOW_AGING,
+	DP_EVENT_TYPE_NEIGHMAC,
 };
 
 struct dp_event_msg_head {
@@ -28,10 +30,16 @@ struct dp_link_status {
 	uint8_t status;
 };
 
+struct dp_neighmac {
+	uint16_t port_id;
+	struct rte_ether_addr mac;
+};
+
 struct dp_event_msg {
 	struct dp_event_msg_head msg_head;
 	union {
 		struct dp_link_status link_status;
+		struct dp_neighmac neighmac;
 	} event_entry;
 };
 
diff --git a/src/dp_conf_opts.c b/src/dp_conf_opts.c
index e63a8674d..a06d718cd 100644
--- a/src/dp_conf_opts.c
+++ b/src/dp_conf_opts.c
@@ -22,6 +22,9 @@ _OPT_SHOPT_MAX = 255,
 	OPT_PF1,
 #ifdef ENABLE_PF1_PROXY
 	OPT_PF1_PROXY,
+#endif
+#ifdef ENABLE_PF1_PROXY
+	OPT_PF1_PROXY_VF,
 #endif
 	OPT_IPV6,
 	OPT_VF_PATTERN,
@@ -61,6 +64,9 @@ static const struct option dp_conf_longopts[] = {
 	{ "pf1", 1, 0, OPT_PF1 },
 #ifdef ENABLE_PF1_PROXY
 	{ "pf1-proxy", 1, 0, OPT_PF1_PROXY },
+#endif
+#ifdef ENABLE_PF1_PROXY
+	{ "pf1-proxy-vf", 1, 0, OPT_PF1_PROXY_VF },
 #endif
 	{ "ipv6", 1, 0, OPT_IPV6 },
 	{ "vf-pattern", 1, 0, OPT_VF_PATTERN },
@@ -114,6 +120,9 @@ static char pf1_name[IF_NAMESIZE];
 #ifdef ENABLE_PF1_PROXY
 static char pf1_proxy[IF_NAMESIZE];
 #endif
+#ifdef ENABLE_PF1_PROXY
+static char pf1_proxy_vf[IF_NAMESIZE];
+#endif
 static char vf_pattern[IF_NAMESIZE];
 static int dhcp_mtu = 1500;
 static int wcmp_perc = 100;
@@ -149,6 +158,13 @@ const char *dp_conf_get_pf1_proxy(void)
 	return pf1_proxy;
 }
 
+#endif
+#ifdef ENABLE_PF1_PROXY
+const char *dp_conf_get_pf1_proxy_vf(void)
+{
+	return pf1_proxy_vf;
+}
+
 #endif
 const char *dp_conf_get_vf_pattern(void)
 {
@@ -248,6 +264,9 @@ static inline void dp_argparse_help(const char *progname, FILE *outfile)
 		"     --pf1=IFNAME                       second physical interface (e.g. eth1)\n"
 #ifdef ENABLE_PF1_PROXY
 		"     --pf1-proxy=IFNAME                 VF representor to use as a proxy for pf1 packets\n"
+#endif
+#ifdef ENABLE_PF1_PROXY
+		"     --pf1-proxy-vf=IFNAME              VF interface of the pf1-proxy VF representor\n"
 #endif
 		"     --ipv6=ADDR6                       IPv6 underlay address\n"
 		"     --vf-pattern=PATTERN               virtual interface name pattern (e.g. 'eth1vf')\n"
@@ -290,6 +309,10 @@ static int dp_conf_parse_arg(int opt, const char *arg)
 #ifdef ENABLE_PF1_PROXY
 	case OPT_PF1_PROXY:
 		return dp_argparse_string(arg, pf1_proxy, ARRAY_SIZE(pf1_proxy));
+#endif
+#ifdef ENABLE_PF1_PROXY
+	case OPT_PF1_PROXY_VF:
+		return dp_argparse_string(arg, pf1_proxy_vf, ARRAY_SIZE(pf1_proxy_vf));
 #endif
 	case OPT_IPV6:
 		return dp_argparse_opt_ipv6(arg);
diff --git a/src/dp_netlink.c b/src/dp_netlink.c
index 0685cf417..adbd4a8b4 100644
--- a/src/dp_netlink.c
+++ b/src/dp_netlink.c
@@ -66,7 +66,7 @@ static int dp_recv_msg(struct sockaddr_nl sock_addr, int sock, char *buf, int bu
 	return (int)msg_len;
 }
 
-int dp_get_pf_neigh_mac(int if_idx, struct rte_ether_addr *neigh, const struct rte_ether_addr *own_mac)
+int dp_get_pf_neigh_mac(uint32_t if_idx, struct rte_ether_addr *neigh, const struct rte_ether_addr *own_mac)
 {
 	struct sockaddr_nl sa = {
 		.nl_family = AF_NETLINK,
@@ -119,11 +119,7 @@ int dp_get_pf_neigh_mac(int if_idx, struct rte_ether_addr *neigh, const struct r
 		goto cleanup;
 	}
 
-	// TODO this should be an error in production
-	if (DP_FAILED(dp_read_neigh((struct nlmsghdr *)reply, reply_len, neigh, own_mac)))
-		DPS_LOG_WARNING("No neighboring router found");
-
-	ret = DP_OK;
+	ret = dp_read_neigh((struct nlmsghdr *)reply, reply_len, neigh, own_mac);
 
 cleanup:
 	close(sock);
diff --git a/src/dp_port.c b/src/dp_port.c
index aea93a7b7..0f42c1192 100644
--- a/src/dp_port.c
+++ b/src/dp_port.c
@@ -1,14 +1,14 @@
 // SPDX-FileCopyrightText: 2023 SAP SE or an SAP affiliate company and IronCore contributors
 // SPDX-License-Identifier: Apache-2.0
 
-#include "dp_error.h"
+#include "dp_port.h"
 #include <rte_bus_pci.h>
 #include "dp_conf.h"
+#include "dp_error.h"
 #include "dp_hairpin.h"
 #include "dp_log.h"
 #include "dp_lpm.h"
 #include "dp_netlink.h"
-#include "dp_port.h"
 #ifdef ENABLE_VIRTSVC
 #	include "dp_virtsvc.h"
 #endif
@@ -29,6 +29,10 @@
 #define DP_PORT_PROXIED true
 #define DP_PORT_NORMAL false
 
+#define DP_PORT_NEIGHMAC_INITIAL_PERIOD 1
+#define DP_PORT_NEIGHMAC_BACKOFF_COEF 2
+#define DP_PORT_NEIGHMAC_MAX_PERIOD 60
+
 #define DP_METER_CIR_BASE_VALUE  (1024 * 1024) // 1 Mbits
 #define DP_METER_EBS_BREAK_VALUE 100     // 100 Mbits/s, it used to differentiate different ebs calculation strategy to achieve relative stable metering results. epirical value.
 #define DP_METER_MBITS_TO_BYTES  (1024 * 1024 / 8)
@@ -91,20 +95,9 @@ struct dp_port *dp_get_port_by_name(const char *pci_name)
 	return _dp_port_table[port_id];
 }
 
-static void dp_set_neighmac(struct dp_port *port, const struct rte_ether_addr *mac)
-{
-	char strmac[18];
-
-	rte_ether_addr_copy(mac, &port->neigh_mac);
-
-	snprintf(strmac, sizeof(strmac), RTE_ETHER_ADDR_PRT_FMT, RTE_ETHER_ADDR_BYTES(&port->neigh_mac));
-	DPS_LOG_INFO("Setting neighboring MAC", _DP_LOG_STR("mac", strmac), DP_LOG_PORT(port));
-}
-
 static int dp_port_init_ethdev(struct dp_port *port, struct rte_eth_dev_info *dev_info)
 {
 	struct dp_dpdk_layer *dp_layer = get_dpdk_layer();
-	struct rte_ether_addr pf_neigh_mac = {0};
 	struct rte_eth_txconf txq_conf;
 	struct rte_eth_rxconf rxq_conf;
 	struct rte_eth_conf port_conf = port_conf_default;
@@ -182,16 +175,6 @@ static int dp_port_init_ethdev(struct dp_port *port, struct rte_eth_dev_info *de
 	static_assert(sizeof(port->dev_name) == RTE_ETH_NAME_MAX_LEN, "Incompatible port dev_name size");
 	rte_eth_dev_get_name_by_port(port->port_id, port->dev_name);
 
-	if (port->is_pf) {
-		if (DP_FAILED(dp_get_pf_neigh_mac(dev_info->if_index, &pf_neigh_mac, &port->own_mac)))
-			return DP_ERROR;
-		dp_set_neighmac(port, &pf_neigh_mac);
-	}
-#ifdef ENABLE_PF1_PROXY
-	else if (dp_conf_is_pf1_proxy_enabled() && port == dp_get_pf1_proxy())
-		dp_set_neighmac(port, &dp_get_pf1()->neigh_mac);
-#endif
-
 	if (dp_conf_is_multiport_eswitch() && DP_FAILED(dp_configure_async_flows(port->port_id)))
 		return DP_ERROR;
 
@@ -260,6 +243,7 @@ static struct dp_port *dp_port_init_interface(uint16_t port_id, struct rte_eth_d
 	port->is_pf = is_pf;
 	port->port_id = port_id;
 	port->socket_id = socket_id;
+	port->if_index = dev_info->if_index;
 	_dp_port_table[port_id] = port;
 
 	if (is_pf && DP_FAILED(dp_port_register_pf(port)))
@@ -274,6 +258,7 @@ static struct dp_port *dp_port_init_interface(uint16_t port_id, struct rte_eth_d
 			DPS_LOG_ERR("Cannot register link status callback", DP_LOG_RET(ret));
 			return NULL;
 		}
+		rte_timer_init(&port->neighmac_timer);
 	} else {
 		// All VFs belong to pf0, assign a tx queue from pf1 for it
 		if (dp_conf_is_offload_enabled()) {
@@ -294,16 +279,25 @@ static struct dp_port *dp_port_init_interface(uint16_t port_id, struct rte_eth_d
 static struct dp_port *dp_port_init_pf1_proxy_interface(uint16_t port_id, struct rte_eth_dev_info *dev_info)
 {
 	struct dp_port *port;
+	uint32_t if_index;
 	int socket_id;
 
 	socket_id = dp_get_port_socket_id(port_id);
 	if (DP_FAILED(socket_id) && socket_id != SOCKET_ID_ANY)
 		return NULL;
 
+	if_index = if_nametoindex(dp_conf_get_pf1_proxy_vf());
+	if (if_index == 0) {
+		DPS_LOG_ERR("Cannot get pf1-proxy vf interface index", DP_LOG_IFACE(dp_conf_get_pf1_proxy_vf()));
+		return NULL;
+	}
+
 	port = &_dp_pf1_proxy_port;
 	port->is_pf = false;
 	port->port_id = port_id;
 	port->socket_id = socket_id;
+	port->if_index = if_index;
+	rte_timer_init(&port->neighmac_timer);
 	_dp_port_table[port_id] = port;
 
 	if (DP_FAILED(dp_port_init_ethdev(port, dev_info)))
@@ -462,6 +456,8 @@ static int dp_stop_eth_port(struct dp_port *port)
 {
 	int ret;
 
+	DPS_LOG_INFO("Stopping port", DP_LOG_PORT(port));
+
 	if (dp_conf_is_multiport_eswitch()) {
 #ifdef ENABLE_VIRTSVC
 		if (port->is_pf)
@@ -580,6 +576,83 @@ static int dp_port_create_default_pf_async_templates(struct dp_port *port)
 	return DP_OK;
 }
 
+
+static void dp_acquire_neigh_mac(struct dp_port *port);
+
+static void dp_neighmac_timer_cb(__rte_unused struct rte_timer *timer, void *arg)
+{
+	struct dp_port *port = arg;
+
+	port->neighmac_period *= DP_PORT_NEIGHMAC_BACKOFF_COEF;
+	if (port->neighmac_period > DP_PORT_NEIGHMAC_MAX_PERIOD)
+		port->neighmac_period = DP_PORT_NEIGHMAC_MAX_PERIOD;
+
+	dp_acquire_neigh_mac(port);
+}
+
+static void dp_acquire_neigh_mac(struct dp_port *port)
+{
+	struct rte_ether_addr pf_neigh_mac = {0};
+	int ret;
+
+	if (DP_FAILED(dp_get_pf_neigh_mac(port->if_index, &pf_neigh_mac, &port->own_mac))) {
+		DPS_LOG_WARNING("No neighboring router, setting timer", DP_LOG_VALUE(port->neighmac_period), DP_LOG_PORT(port));
+
+		// need to use the same lcore each time, thus staying on main one even when called from the worker
+		ret = rte_timer_reset(&port->neighmac_timer, port->neighmac_period * rte_get_timer_hz(),
+							  SINGLE, rte_get_main_lcore(), dp_neighmac_timer_cb, port);
+		if (DP_FAILED(ret))
+			DPS_LOG_WARNING("Cannot start neigboring router timer", DP_LOG_PORT(port), DP_LOG_RET(ret));
+
+		return;
+	}
+
+#ifdef ENABLE_PF1_PROXY
+	if (dp_conf_is_pf1_proxy_enabled() && port == dp_get_pf1_proxy())
+		port = dp_get_port_by_pf_index(1);
+#endif
+	if (DP_FAILED(dp_send_event_neighmac_msg(port->port_id, &pf_neigh_mac)))
+		DPS_LOG_WARNING("Cannot send neigboring router mac to worker thread");
+}
+
+void dp_start_acquiring_neigh_mac(struct dp_port *port)
+{
+#ifdef ENABLE_PF1_PROXY
+	if (dp_conf_is_pf1_proxy_enabled() && port == dp_get_pf1())
+		port = &_dp_pf1_proxy_port;
+#endif
+	port->neighmac_period = DP_PORT_NEIGHMAC_INITIAL_PERIOD;
+	dp_acquire_neigh_mac(port);
+}
+
+void dp_stop_acquiring_neigh_mac(struct dp_port *port)
+{
+#ifdef ENABLE_PF1_PROXY
+	if (dp_conf_is_pf1_proxy_enabled() && port == dp_get_pf1())
+		port = &_dp_pf1_proxy_port;
+#endif
+	rte_timer_stop_sync(&port->neighmac_timer);
+}
+
+int dp_set_neigh_mac(uint16_t port_id, const struct rte_ether_addr *mac)
+{
+	struct dp_port *port;
+	char strmac[18];
+
+	port = dp_get_port_by_id(port_id);
+	if (!port) {
+		DPS_LOG_WARNING("Cannot set neighboring router, port invalid", DP_LOG_PORTID(port_id));
+		return DP_ERROR;
+	}
+
+	rte_ether_addr_copy(mac, &port->neigh_mac);
+
+	snprintf(strmac, sizeof(strmac), RTE_ETHER_ADDR_PRT_FMT, RTE_ETHER_ADDR_BYTES(&port->neigh_mac));
+	DPS_LOG_INFO("Setting PF neighboring router", _DP_LOG_STR("mac", strmac), DP_LOG_PORT(port));
+	return DP_OK;
+}
+
+
 static int dp_init_port(struct dp_port *port)
 {
 	// TAP devices do not support offloading/isolation
@@ -614,8 +687,13 @@ static int dp_init_port(struct dp_port *port)
 
 int dp_start_port(struct dp_port *port)
 {
+	struct rte_eth_link link = {
+		.link_status = RTE_ETH_LINK_DOWN
+	};
 	int ret;
 
+	DPS_LOG_INFO("Starting port", DP_LOG_PORT(port));
+
 	ret = rte_eth_dev_start(port->port_id);
 	if (DP_FAILED(ret)) {
 		DPS_LOG_ERR("Cannot start ethernet port", DP_LOG_PORT(port), DP_LOG_RET(ret));
@@ -628,11 +706,43 @@ int dp_start_port(struct dp_port *port)
 		return ret;
 	}
 
-	port->link_status = RTE_ETH_LINK_UP;
+	if (port->is_pf) {
+		// this really only fails on bad arguments (or incompatible driver)
+		ret = rte_eth_link_get(port->port_id, &link);
+		if (DP_FAILED(ret))
+			DPS_LOG_WARNING("Unable to get the initial link status, assuming it down", DP_LOG_PORT(port), DP_LOG_RET(ret));
+	} else
+		link.link_status = RTE_ETH_LINK_UP;
+
+	port->link_status = link.link_status;
 	port->allocated = true;
 	return DP_OK;
 }
 
+int dp_start_pf_port(uint16_t index)
+{
+	struct dp_port *port = dp_get_port_by_pf_index(index);
+
+	if (!port) {
+		DPS_LOG_ERR("Invalid PF index", DP_LOG_VALUE(index), DP_LOG_MAX(DP_MAX_PF_PORTS));
+		return DP_ERROR;
+	}
+
+	if (DP_FAILED(dp_start_port(port)))
+		return DP_ERROR;
+
+	DPS_LOG_INFO("Received initial PF link state", DP_LOG_LINKSTATE(port->link_status), DP_LOG_PORT(port));
+
+	if (port->link_status == RTE_ETH_LINK_UP)
+#ifdef ENABLE_PF1_PROXY
+		// Do not use PF1 in pf1-proxy mode as Linux does not use it then (thus the mac will never be there)
+		if (!dp_conf_is_pf1_proxy_enabled() || port != dp_get_pf1())
+#endif
+			dp_start_acquiring_neigh_mac(port);
+
+	return DP_OK;
+}
+
 #ifdef ENABLE_PF1_PROXY
 int dp_start_pf1_proxy_port(void)
 {
@@ -644,6 +754,9 @@ int dp_start_pf1_proxy_port(void)
 		return ret;
 	}
 
+	if (dp_get_pf1()->link_status == RTE_ETH_LINK_UP)
+		dp_start_acquiring_neigh_mac(&_dp_pf1_proxy_port);
+
 	_dp_pf1_proxy_port.allocated = true;
 	return DP_OK;
 }
@@ -661,6 +774,7 @@ int dp_stop_port(struct dp_port *port)
 	return DP_OK;
 }
 
+
 static int dp_port_total_flow_meter_config(struct dp_port *port, uint64_t total_flow_rate_cap)
 {
 	return dp_set_vf_rate_limit(port->port_id, total_flow_rate_cap);
diff --git a/src/dp_service.c b/src/dp_service.c
index 8701f0977..5b58aa33a 100644
--- a/src/dp_service.c
+++ b/src/dp_service.c
@@ -160,10 +160,10 @@ static int init_interfaces(void)
 		|| DP_FAILED(dp_telemetry_init()))
 		return DP_ERROR;
 
-	if (DP_FAILED(dp_start_port(dp_get_port_by_pf_index(0))))
+	if (DP_FAILED(dp_start_pf_port(0)))
 		return DP_ERROR;
 
-	if (DP_FAILED(dp_start_port(dp_get_port_by_pf_index(1))))
+	if (DP_FAILED(dp_start_pf_port(1)))
 		return DP_ERROR;
 
 #ifdef ENABLE_PF1_PROXY
@@ -236,9 +236,26 @@ static int run_service(void)
 		return DP_ERROR;
 	}
 
-	if (dp_conf_is_multiport_eswitch() && dp_conf_is_offload_enabled()) {
-		DP_EARLY_ERR("HW offloading is currently not supported for multi-port eswitch mode");
-		return DP_ERROR;
+	if (dp_conf_is_multiport_eswitch()) {
+		if (dp_conf_is_offload_enabled()) {
+			DP_EARLY_ERR("HW offloading is currently not supported for multi-port eswitch mode");
+			return DP_ERROR;
+		}
+#ifdef ENABLE_PF1_PROXY
+		if (dp_conf_is_pf1_proxy_enabled()) {
+			if (*dp_conf_get_pf1_proxy_vf() == '\0') {
+				DP_EARLY_ERR("PF1-proxy also requires --pf1-proxy-vf argument to be set");
+				return DP_ERROR;
+			}
+		}
+#endif
+	} else {
+#ifdef ENABLE_PF1_PROXY
+		if (dp_conf_is_pf1_proxy_enabled()) {
+			DP_EARLY_ERR("PF1-proxy is only supported for multiport-eswitch mode");
+			return DP_ERROR;
+		}
+#endif
 	}
 
 	if (DP_FAILED(dp_log_init()))
diff --git a/src/monitoring/dp_event.c b/src/monitoring/dp_event.c
index 5956425ee..a2d1c66ee 100644
--- a/src/monitoring/dp_event.c
+++ b/src/monitoring/dp_event.c
@@ -60,6 +60,7 @@ int dp_link_status_change_event_callback(uint16_t port_id,
 										 __rte_unused void *ret_param)
 {
 	struct rte_eth_link link;
+	struct dp_port *port;
 	int ret;
 
 	ret = rte_eth_link_get_nowait(port_id, &link);
@@ -68,10 +69,18 @@ int dp_link_status_change_event_callback(uint16_t port_id,
 		return ret;
 	}
 
-	if (DP_FAILED(dp_send_event_link_msg(port_id, link.link_status)))
+	port = dp_get_port_by_id(port_id);
+	if (!port) {
+		DPS_LOG_ERR("Link change failed to get port", DP_LOG_PORTID(port_id), DP_LOG_VALUE(link.link_status));
 		return DP_ERROR;
+	}
 
-	return DP_OK;
+	if (link.link_status == RTE_ETH_LINK_UP)
+		dp_start_acquiring_neigh_mac(port);
+	else
+		dp_stop_acquiring_neigh_mac(port);
+
+	return dp_send_event_link_msg(port_id, link.link_status);
 }
 
 void dp_process_event_link_msg(struct rte_mbuf *m)
@@ -88,6 +97,7 @@ void dp_process_event_link_msg(struct rte_mbuf *m)
 	}
 
 	port->link_status = status;
+	DPS_LOG_INFO("PF link state changed", DP_LOG_LINKSTATE(port->link_status), DP_LOG_PORT(port));
 }
 
 // Flow-aging message - sent periodically to age-out conntracked flows
@@ -119,3 +129,28 @@ void dp_process_event_flow_aging_msg(__rte_unused struct rte_mbuf *m)
 	// which enables fully control of hw rules' lifecycle from the software path for tcp flows.
 	dp_process_aged_flows_non_offload();
 }
+
+// Neighboring router MAC message - sent after acquiring it (sometimes asynchronously from a timer)
+
+int dp_send_event_neighmac_msg(uint16_t port_id, struct rte_ether_addr *neighmac)
+{
+	struct dp_event_msg neighmac_msg = {
+		.msg_head = {
+			.type = DP_EVENT_TYPE_NEIGHMAC,
+		},
+		.event_entry = {
+			.neighmac = {
+				.port_id = port_id,
+				.mac = *neighmac,
+			}
+		}
+	};
+	return dp_send_event_msg(&neighmac_msg);
+}
+
+void dp_process_event_neighmac_msg(struct rte_mbuf *m)
+{
+	struct dp_event_msg *neighmac_msg = rte_pktmbuf_mtod(m, struct dp_event_msg *);
+
+	dp_set_neigh_mac(neighmac_msg->event_entry.neighmac.port_id, &neighmac_msg->event_entry.neighmac.mac);
+}
diff --git a/src/monitoring/dp_monitoring.c b/src/monitoring/dp_monitoring.c
index 3ab020e76..baae36e67 100644
--- a/src/monitoring/dp_monitoring.c
+++ b/src/monitoring/dp_monitoring.c
@@ -21,6 +21,9 @@ void dp_process_event_msg(struct rte_mbuf *m)
 	case DP_EVENT_TYPE_FLOW_AGING:
 		dp_process_event_flow_aging_msg(m);
 		break;
+	case DP_EVENT_TYPE_NEIGHMAC:
+		dp_process_event_neighmac_msg(m);
+		break;
 	}
 
 	rte_pktmbuf_free(m);
diff --git a/test/local/reflector.py b/test/local/reflector.py
index 74416f44b..714b0e5eb 100755
--- a/test/local/reflector.py
+++ b/test/local/reflector.py
@@ -1,5 +1,8 @@
 #!/usr/bin/env python3
 
+# SPDX-FileCopyrightText: 2023 SAP SE or an SAP affiliate company and IronCore contributors
+# SPDX-License-Identifier: Apache-2.0
+
 import argparse
 import multiprocessing
 import sys