SGT Inline Tagging
Each security group in a Cisco TrustSec domain is assigned a unique 16 bit tag called the Security Group Tag (SGT). The SGT is a single label indicating the privileges of the source within the entire network. It is in turn propagated between network hops allowing any intermediary devices (switches, routers) to enforce polices based on the identity tag.
Cisco TrustSec-capable devices have built-in hardware capabilities that can send and receive packets with SGT embedded in the MAC (L3) layer. This feature is called Layer 3 (L3)-SGT Imposition. It allows ethernet interfaces on the device to be enabled for L3-SGT imposition so that the device can insert an SGT in the packet to be carried to its next hop ethernet neighbor. SGT-over-Ethernet is a method of hop-by-hop propagation of SGT embedded in clear-text (unencrypted) ethernet packets. The inline identity propagation is scalable, provides near line-rate performance, and avoids control plane overhead.
The Cisco TrustSec with SGT Exchange Protocol V4 (SXPv4) feature supports Cisco TrustSec metadata-based L3-SGT. When a packet enters a Cisco TrustSec-enabled interface, the IP-SGT mapping database (with dynamic entries built by SXP and/or static entries built by configuration commands) is analyzed to learn the SGT corresponding to the source IP address of the packet, which is then inserted into the packet and carried throughout the network within the Cisco TrustSec header.
Cisco TrustSec enforces role-based access control using Security Group Tags (SGTs) and Destination Group Tags (DGTs). An SGT is assigned to traffic at the ingress point or can be propagated from a trusted peer device, identifying the security group of the source. At the egress point, the Destination Group Tag (DGT) is determined. Access decisions are made using Security Group Access Control Lists (SGACLs), which define permitted interactions between source and destination groups.
A network device at the ingress of Cisco TrustSec cloud needs to determine the SGT of the packet entering the Cisco TrustSec cloud so that it can tag the packet with that SGT when it forwards it into the Cisco TrustSec cloud. The SGT of a packet can be determined with these methods:
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SGT field on Cisco TrustSec header: If a packet is coming from a trusted peer device, it is assumed that the Cisco TrustSec header carries the correct SGT field. This situation applies to a network that is not the first network device in the Cisco TrustSec cloud for the packet.
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SGT lookup based on source IP address: In some cases, the administrator may manually configure a policy to decide the SGT of a packet based upon the source IP address. An IP address to SGT table can also be populated by the SXP protocol.
The following figures explains the topologies:

