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More exactly: Which protocol is embedded into which?

The relevant Wiki page describes only the protocol, but not its relation to the ethernet. It isn't even made clear if it uses embedded ethernet packets in it, or it is some modification of it (i.e. a different L2 protocol, using the same 48-bit addressing scheme).

Digging some Linux kernel sources also doesn't reveal too much - most of the WPA communication is being done by hardware support, as I understood it, the kernel can see only an ethernet interface from it.

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Ethernet (IEEE 802.3) is a completely separate protocol from Wi-Fi (IEEE 802.11). The IEEE has had and maintained multiple different LAN protocols. For example, there is token ring (IEEE 802.5), and it has no relationship to either ethernet or Wi-Fi. They are simply separate LAN protocols maintained by the same standards body.

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802.3 Ethernet and 802.11 Wireless LAN are two separate L2 standards maintained by the IEEE. Neither one has any direct relation to the other, although there certainly are some similarities. Neither is embedded in the other nor encapsulates the frames of the other, and their frame structure is incompatible without some device to bridge the connection.

The device that allows a wireless client to connect to the wired LAN is called an access point (AP). An AP is simply a L2 translating bridge that allows devices using two different L2 protocols to communicate with each other. As a frame passes through the AP, the AP will translate one L2 protocol to the other.

This in many ways is similar to the way bridges were used to connect Ethernet networks to Token Ring, FDDI or other L2 protocols before Ethernet became predominant.

Digging some Linux kernel sources also doesn't reveal too much - most of the WPA communication is being done by hardware support, as I understood it, the kernel can see only an ethernet interface from it.

From what I understand, on some operating system the driver functions as a L2 bridge and translates the traffic to 802.3 Ethernet before handing it off to an existing network stack (which was written to accept 802.3 traffic). Apparently this was the most expedient way to do things for developers rather than rewriting the network stack to accept a new, somewhat confusing, and rapidly changing L2 protocol.

This is largely based off information I was given by a couple individuals I met when I was looking into this myself (see this question on AskUbuntu where I received no answer if you were wondering why). I don't have any direct knowledge or documentation to back this understanding, so take it for what it is worth.

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