VPN Tunneling: Protocols, Security Risks, and Alternatives

What Is VPN Tunneling?

VPN tunneling is a process that creates a secure, encrypted pathway for your data to travel between your device and a VPN server. It is the core technology that a Virtual Private Network (VPN) uses to protect your online activity and privacy.

How VPN tunneling works:

1. Connection initiation: You begin a VPN session through a client application on your device. 
2. Encryption and encapsulation: Your internet traffic is split into data packets. The VPN client encrypts each packet, making the data unreadable to anyone who intercepts it. It then wraps these encrypted packets in a new, unencrypted outer packet, a process known as encapsulation. 
3. Secure transmission: The encapsulated packets travel through the “tunnel” across the public internet to the VPN server. To outside observers, like your Internet Service Provider (ISP), the traffic appears to come from the VPN server, not your device. 
4. Decryption: When the packets arrive at the VPN server, the server authenticates the connection and decrypts the data. 
5. Forwarding: The VPN server sends the decrypted request to its final destination, such as a website or an online service. The destination server sees the request originating from the VPN server’s IP address, not yours. 
6. Secure return: The process is reversed for the website’s response, which travels back through the secure tunnel, is encrypted by the VPN server, and finally decrypted by the VPN client on your device.

This technology is used by both individuals and organizations to protect sensitive information and bypass network restrictions. Businesses use VPN tunneling to provide employees remote access to internal resources, while consumers use it to shield their browsing activities or access geo-blocked content. 

How VPN Tunneling Works 

1. Connection Initiation

The VPN connection process begins when the client launches a VPN application or service and submits credentials to the VPN server. Authentication can involve usernames and passwords, certificates, or multi-factor methods, depending on security requirements. Once the server verifies the client’s identity, both endpoints negotiate cryptographic parameters, selecting algorithms, establishing shared keys, and agreeing on protocol specifics. 

After authentication and handshake, the VPN tunnel is instantiated at the network and transport layers, typically using protocols like OpenVPN, L2TP/IPsec, or others. The endpoints now have an agreed set of cryptographic keys and methods, which will be used to protect data for the duration of the session. 

2. Encryption and Encapsulation

Once the VPN tunnel is established, all user data destined for the internet or a specific private network is encrypted using the symmetric keys negotiated during initiation. Encryption algorithms such as AES or ChaCha20 ensure that if traffic is intercepted, it cannot be understood or manipulated by third parties. This scrambles the payload so that the original content is only accessible to devices possessing the correct key (the client and the VPN server).

In addition to encryption, VPN tunneling protocols encapsulate data packets inside new network packets. This process, known as encapsulation, involves adding extra headers to route the encrypted traffic through the tunnel. The encapsulated packet is indistinguishable from any other internet traffic to non-involved observers, hiding not only the payload but often the true destination.

3. Secure Transmission

After encryption and encapsulation, the protected data traverses the internet or other untrusted networks, moving from client to VPN server. This segment is particularly vulnerable in conventional communications because public networks are often monitored or susceptible to man-in-the-middle attacks. However, the secure tunnel prevents anyone in transit, such as ISPs, hackers, or governments, from accessing or tampering with the data. 

Network threats like packet sniffing, eavesdropping, or content modification are neutralized by the VPN tunnel’s end-to-end encryption. Even in environments with open Wi-Fi or compromised infrastructure, the underlying payload is unreadable. Intrusion attempts will result in unintelligible data.

4. Decryption

Upon reaching the VPN server, the encapsulated, encrypted packets are first unwrapped using the same cryptographic protocols agreed during initialization. The outer headers and encapsulation layers are removed, and the server decrypts the payload with the appropriate session key. This restoration process turns the protected data back into its original, readable form, ready to be processed or forwarded.

The decryption process is tightly controlled: if any step or key is invalid, the data is discarded rather than delivered. This ensures that only properly authenticated and encrypted traffic can reach its final internal or internet destination. Decrypted data packets can then be passed to their endpoint, having never been exposed in unprotected form during their journey over public networks.

5. Forwarding

After decryption, the VPN server acts as a relay, forwarding user data to its ultimate destination, such as a cloud resource, corporate application, or internet service. From the perspective of the remote resource or website, the request appears to come from the VPN server, not the original user. This masking of the user’s real IP address adds another layer of privacy and helps users avoid tracking or geo-restrictions.

This server-side forwarding breaks the direct link between source and destination, making it difficult for third parties to correlate user identity and activity. It also allows organizations to implement additional policy controls, filtering, or threat detection at the VPN server. 

6. Secure Return

The return journey of the data mirrors the outgoing process. The VPN server receives responses from the external resource, encrypts and encapsulates the packets, and sends them back through the established secure tunnel to the client. This ensures that the return traffic is subject to the same privacy and integrity protections as the outgoing data, so no sensitive content is exposed in transit.

Once the encapsulated response reaches the client device, the VPN software decrypts and decapsulates the data, delivering it in usable form to the application or operating system. This two-way exchange ensures that, for the duration of the VPN session, all traffic remains protected, private, and shielded from monitoring or manipulation on public networks.

Common VPN Tunneling Protocols

Point-to-Point Tunneling Protocol (PPTP)

PPTP is one of the earliest VPN tunneling protocols and was widely adopted due to its straightforward setup and compatibility with most operating systems. It encapsulates data using a modified version of Point-to-Point Protocol (PPP) and transmits it over GRE tunnels. While easy to configure and requiring minimal overhead, PPTP’s security relies on outdated encryption schemes that are now considered highly vulnerable to modern attacks.

Today, PPTP is largely obsolete and should be avoided for secure communications. Its weak encryption (typically MS-CHAP v2) can be broken with minimal effort, exposing sensitive data to interception. While it may still be used for non-critical applications where legacy support is necessary, organizations and individuals requiring secure connections should opt for more robust tunneling solutions.

Layer 2 Tunneling Protocol (L2TP) / IPsec

L2TP is not an encryption protocol by itself; instead, it creates a tunnel at the data link layer and relies on IPsec for securing the transmitted data. L2TP/IPsec is recognized for balancing security with ease of deployment, making it a common choice for VPN providers. Together, L2TP and IPsec encapsulate data twice, providing encryption, authentication, and integrity-checking for both the tunnel and the payload.

The dual encapsulation used by L2TP/IPsec can introduce additional latency and make the protocol more susceptible to network issues such as NAT traversal problems. Nonetheless, it remains significantly more secure than older protocols like PPTP. L2TP/IPsec is suitable for scenarios requiring compatibility and moderate security but is being superseded by newer, faster, and more secure alternatives.

Secure Socket Tunneling Protocol (SSTP)

SSTP was developed by Microsoft to provide VPN tunneling over SSL/TLS. It operates at the transport layer, encapsulating traffic within HTTPS packets, making it adept at bypassing firewalls that block other VPN protocols. All data is encrypted and authenticated using SSL/TLS, leveraging the mature and widely supported security of HTTPS.

SSTP is tightly integrated into the Windows ecosystem, with native support in Windows Vista and later, but has limited cross-platform compatibility compared to alternatives like OpenVPN and WireGuard. Despite this, it offers strong security and is particularly suited for environments where HTTPS traffic is the only type allowed through network controls. However, organizations with diverse device requirements may find its reach too constricted.

OpenVPN

OpenVPN is a highly popular open-source VPN protocol recognized for its flexibility, security, and cross-platform support. It utilizes SSL/TLS for key exchange and can use a variety of encryption and authentication methods, including AES-256. OpenVPN operates on both UDP and TCP, allowing it to balance speed and reliability as needed by the application or network.

One of OpenVPN’s main advantages is its customizability: it can be run on almost any platform, with extensive support for plugins, scripts, and advanced network configurations. This makes it a top choice for organizations and individuals that demand a secure, reliable, and adaptable VPN tunneling solution. That said, its complex configuration options and the need for third-party clients can create challenges for less technical users or standardized environments.

Internet Key Exchange v2 (IKEv2) / IPsec

IKEv2, often used with IPsec, is a modern VPN protocol known for its security and speed, especially on mobile devices. It supports automatic reconnection, making it resilient to network changes, suitable  for smartphones and tablets that frequently switch between Wi-Fi and cellular networks. Like L2TP, IKEv2 relies on IPsec for authenticating and encrypting data, but provides improved efficiency in establishing and maintaining tunnels.

IKEv2/IPsec combines encryption, authentication, and flexibility, supporting features like mobility and multihoming. With built-in support on many operating systems, deployment is straightforward. Its security and performance make it a recommended choice for modern VPN applications, though it is still subject to the security considerations of IPsec implementations.

WireGuard

WireGuard is a new-generation VPN protocol designed to be simple, fast, and secure. It uses modern cryptographic primitives (such as Curve25519 for key exchange and ChaCha20 for encryption) with a simplified codebase, reducing the risk of vulnerabilities and making it easier to audit. WireGuard’s design focuses on efficiency and performance, allowing for faster speeds and reduced latency compared to older protocols.

Another benefit of WireGuard is its clean integration with operating system kernels, resulting in high stability and lower resource usage. Although it’s newer and still being adopted across different platforms, it is rapidly gaining popularity for personal, business, and enterprise VPN solutions. Its straightforward setup and default strong security make it a compelling alternative to established protocols like OpenVPN and IKEv2/IPsec.

Generic Routing Encapsulation (GRE)

GRE is a tunneling protocol developed by Cisco for encapsulating various network layer protocols inside virtual point-to-point connections. GRE itself does not provide encryption or security: its primary function is to enable routing of non-IP protocols or support multicast traffic and virtual private networking across shared infrastructure. It is valued for its simplicity and compatibility across networks.

Because GRE does not include any encryption, authentication, or integrity-checking, it should not be used alone for sensitive data transmission. Instead, GRE tunnels are often paired with IPsec to add security components, combining the flexibility of GRE routing with the cryptographic strength of IPsec. Used properly, it supports networking in complex enterprise environments.

SSH Tunneling

SSH tunneling leverages the Secure Shell (SSH) protocol to forward data securely between systems over an encrypted connection. It is commonly used for secure remote administration of servers but can also tunnel arbitrary TCP traffic, including web browsing. SSH tunnels are straightforward to create and require only basic command-line tools on most operating systems.

Despite its encryption and simplicity, SSH tunneling is less suited for large-scale VPN deployment compared to other protocols. It is typically used for occasional, ad hoc secure connectivity or bypassing firewalls for single applications. For ongoing full-network VPN needs, purpose-built protocols like OpenVPN or WireGuard are generally preferable due to their scalability, performance, and management capabilities.

Related content: Read our guide to VPN security (coming soon)

What Is VPN Split Tunneling? 

VPN split tunneling is a feature that allows users to choose which network traffic is routed through the VPN tunnel and which traffic goes directly to the internet or local networks. Instead of forcing all data through the secure tunnel, users or administrators can designate certain applications, websites, or destinations to bypass the VPN. 

This targeted approach helps optimize bandwidth and performance by avoiding unnecessary encryption and detours for non-sensitive traffic. Split tunneling is useful in scenarios where access to local network resources (like printers or file servers) is required while still maintaining a secure tunnel for sensitive data. 

However, it also introduces certain risks: if not properly configured, sensitive information may accidentally be sent outside the VPN, weakening overall security. Organizations must carefully consider their security policies before deploying split tunneling and weigh the balance between convenience, bandwidth management, and data protection.

VPN Tunneling Risks and Considerations 

Here are some important considerations for individuals or organizations considering using VPN tunnelling for secure communication.

1. Weak or Outdated Protocols / Encryption

Outdated tunneling protocols like PPTP or those using weak cryptographic algorithms present substantial risks. Advancements in computing power and attack methods mean vulnerabilities in these protocols can be easily exploited. If organizations continue using outdated encryption, attackers can perform brute-force decryption or exploit publicly known weaknesses, exposing data that users assume is protected.

2. Configuration and Implementation Flaws

Incorrect VPN configurations, such as misconfigured authentication, poorly managed certificates, or improper access controls, can create exploitable weaknesses regardless of underlying protocol strength. Attackers often target these oversights, bypassing encryption entirely by exploiting network or application-layer vulnerabilities introduced during configuration. Implementation flaws can also lead to broader issues, such as unintended routing, resource exposure, or failure to enforce security policies consistently. 

3. Traffic Leaks and Bypassed Protection

VPNs are designed to route all traffic securely through encrypted tunnels, but improper setups can cause traffic spills outside the tunnel, known as leaks. Typical sources include DNS leaks, IPv6 leaks, or fallback to unprotected connections if the VPN drops temporarily. These leaks can expose user activity or sensitive data to third parties without users realizing it.

4. Performance Overhead

Encrypting data and routing all communications through a secure tunnel adds latency and consumes processing resources, resulting in slower network performance. High cryptographic overhead, double encapsulation, and traffic bottlenecks at overloaded VPN servers can degrade user experience, especially during high-bandwidth activities like video calls or large file transfers.

Alternative Solutions and Technologies 

Secure Enclave Technology

Secure enclaves keep work contained within a company-controlled, encrypted space – separate from the personal side of the device – so sensitive information never spills over into unmanaged areas. Access policies, data controls, and monitoring apply only inside the enclave, preserving user privacy while giving IT the control it needs. Even if the device is lost, stolen, or compromised, business data remains protected because it never leaves the enclave’s boundaries.

This approach goes beyond what VPN tunneling alone can deliver. A VPN secures data in transit but relies on the endpoint itself to be safe; a secure enclave assumes the opposite and builds protection directly into the workspace. By isolating applications, encrypting data at rest and in transit, and locking down how files can move in and out, secure enclaves give distributed and BYOD workforces a reliable way to work locally – with security, compliance, and performance baked in.

Zero Trust Network Access (ZTNA)

ZTNA is a security model that treats all network traffic as untrusted, requiring strict authentication and authorization for every access attempt, regardless of user location. ZTNA solutions enforce least-privilege access to resources, typically verifying device health, user identity, and contextual information before permitting entry. This model prevents lateral movement by attackers, minimizing the risk posed by compromised endpoints.

ZTNA replaces or supplements traditional VPNs by providing application-level access rather than network-wide exposure. Users connect directly to the specific resources they need, with gateways enforcing policy and inspecting traffic. 

Secure Access Service Edge (SASE)

SASE is an architectural approach that converges network security functions with WAN capabilities into a cloud-delivered service. It combines VPN-like connectivity with additional security measures such as firewall-as-a-service, secure web gateways, cloud access security brokers, and zero trust access controls. SASE aims to centralize policy, threat detection, and enforcement for users and devices, regardless of location.

This approach simplifies network and security operations while delivering improved visibility and scalable protection. With SASE, organizations can efficiently accommodate mobile users, IoT devices, and hybrid cloud deployments without relying on traditional perimeter-based security models. 

Proxy Servers

Proxy servers act as intermediaries between users and destination services, requests being routed through the proxy which then fetches and returns internet content. This allows for anonymity, content filtering, access control, and sometimes caching for performance. HTTP and SOCKS proxies are commonly used to bypass content restrictions or shield user IP addresses without the complexity of a full VPN.

However, proxy servers usually do not encrypt data unless paired with additional security layers like SSL. One limitation is their inability to protect all forms of traffic: they typically handle specific protocols or applications. For organizations or individuals needing broad protection across multiple protocols or secure end-to-end encryption, a full-featured VPN or ZTNA solution is generally preferable.

Smart DNS

Smart DNS services reroute only DNS requests rather than entire data connections. By resolving domain queries through servers in desired regions, Smart DNS can help users bypass geo-restrictions on streaming platforms or websites. Unlike VPNs, Smart DNS does not encrypt traffic or mask all internet activity: only DNS-related queries are modified to appear as originating from authorized regions.

This approach delivers better speeds than VPN tunneling since data routing remains direct and unencrypted, but it sacrifices privacy and security. Smart DNS is useful for circumvention rather than protection; it should not be used for confidential communications. Users needing genuine data security and anonymity must consider alternatives such as VPNs or ZTNA.

Best Practices for VPN Tunneling 

Organizations should consider the following practices when using VPN tunneling.

1. Choose Modern, Secure Protocols

The security of a VPN tunnel is directly tied to the protocols and cryptographic algorithms in use. Modern, well-maintained protocols such as OpenVPN, IKEv2/IPsec, and WireGuard offer strong default encryption and regularly updated codebases that address known vulnerabilities. Avoid protocols like PPTP or L2TP without IPsec, as their aging security models are inadequate for protecting sensitive data.

Regularly review the security landscape for new advisories and perform timely upgrades. Where possible, enforce the use of only the latest protocol versions and disable deprecated alternatives in all client and server configurations. This reduces the risk of exploitable weaknesses and ensures continued protection against evolving threats.

2. Use Strong Authentication and Key Exchange

Even with robust encryption, weak or compromised authentication undermines VPN security. Enforce multi-factor authentication (MFA) where possible, and use strong, unique credentials or certificates for client authentication. Employ secure key exchange mechanisms, such as Diffie-Hellman groups with sufficiently large key sizes or elliptic curve alternatives, to guard against interception or brute force.

Regularly rotate credentials and cryptographic keys, especially following personnel changes or detected incidents. Evaluate and update key management policies to align with current best practices. Consistent application of these measures reduces the risk of unauthorized access and strengthens the overall resilience of the VPN infrastructure.

3. Minimize Data Leakage and Split Tunnel Exposure

Split tunneling should be enabled only when there is a clear benefit and the risk has been properly assessed. Where it is necessary, define strict routing rules to control which traffic is excluded from the tunnel. Implement kill switches and DNS leak protection on all client devices to prevent data from unintentionally bypassing the VPN in case of connectivity loss or misconfiguration.

Conduct routine audits and penetration tests to identify and address potential leaks. Educate users about the risks associated with split tunneling and train them to recognize situations where sensitive data might leave the protected tunnel. These steps help maintain the confidentiality of high-risk traffic even in complex networking scenarios.

4. Monitor Performance and Security Events

Monitoring is vital for promptly detecting anomalies, performance bottlenecks, or malicious activity on VPN endpoints. Set up logging and alerting on both client and server layers, tracking connection attempts, tunnel drops, protocol errors, and unexpected traffic flows. Use automated tools to correlate events and flag deviations from normal behavior.

Performance metrics, such as latency, throughput, and packet loss, should be regularly reviewed to ensure that security measures do not degrade user experience to unacceptable levels. This dual focus on security and usability enables proactive tuning and helps prevent security controls from inadvertently creating new risks due to user workarounds or unmanaged bypasses.

5. Regularly Update and Audit VPN Configurations

Frequent updates to VPN software and hardware components are essential for addressing vulnerabilities as they emerge. Make patch management a scheduled process and automate updates where possible, minimizing the window of exposure. Periodic third-party security audits of configurations and code can uncover issues overlooked during routine maintenance.

Take time to verify certificate expirations, protocol deprecation notices, and alignment with security policies after each update. Document all configuration changes to support incident response and environmental rollback if necessary. An up-to-date, audited VPN environment greatly reduces the opportunity for attackers to exploit obsolete or misconfigured infrastructure.

Venn: Ultimate Alternative to VPN Tunnelling for Secure Remote Access

Venn’s Blue Border builds on what VPN tunneling starts — but extends protection far beyond the connection itself. A traditional VPN secures traffic in transit, but once data reaches the device, it’s exposed to whatever else lives on that endpoint. Venn closes that gap by creating a company-controlled Secure Enclave on the user’s laptop, where work data is encrypted at rest and in transit, access is managed, and applications run locally inside an isolated environment. IT gets the controls required for security and compliance, but only inside the enclave — never touching the user’s personal files, settings, or activity.

This approach strengthens a VPN-only strategy without introducing the downsides of full device takeover. Users keep their laptops the way they like them, while companies get a protected workspace that prevents data from leaking into personal areas and supports regulatory requirements. It’s the same secure connection you expect from a VPN — with the added layer of hardened endpoint protection that BYOD workforces actually need.

Key features include:

• Secure Enclave technology: Encrypts and isolates work data on personal Macs and PCs, supporting both browser-based and local applications.
• Zero trust architecture: Validates users and devices for every access request without assuming the endpoint is trustworthy.
• Visual separation via Blue Border: A clear visual cue that distinguishes work from personal activity.
• Supports turnkey compliance: Helps organizations meet HIPAA, PCI, SOC, SEC, FINRA, and other regulatory requirements on unmanaged devices.
• Granular, customizable restrictions: Fine-grained controls for copy/paste, downloads, uploads, screenshots, watermarks, and DLP — configurable per user.