DHCP relay agents eliminate the need to have a DHCP server on each physical network. Relay agents populate the giaddr field and also append the Relay Agent Information option to the DHCP messages. DHCP servers use this option for IP addresses and other parameter assignment policies. These DHCP relay agents are typically IP routing-aware devices and are referred to as Layer 3 relay agents.
In some network configurations, there is a need for Layer 2 devices to append the relay agent Information option as they are closer to the end hosts.
These Layer 2 devices typically operate only as bridges for the network and might not have an IPv4 address on the network. Lacking a valid IPv4 source address, they cannot relay packets directly to a DHCP server located on another network. These Layer 2 devices append the Relay agent information option and broadcast the DHCP message.