About the MTU

The MTU specifies the maximum frame payload size that the threat defense device can transmit on a given Ethernet interface. The MTU value is the frame size without Ethernet headers, VLAN tagging, or other overhead. For example, when you set the MTU to 1500, the expected frame size is 1518 bytes including the headers, or 1522 when using VLAN. Do not set the MTU value higher to accommodate these headers.

For Geneve, the entire Ethernet datagram is being encapsulated, so the new IP packet is larger and requires a larger MTU: you should set the ASA VTEP source interface MTU to be the network MTU + 306 bytes.