As simple as the DHCP concept is, it can experience a crucial setback in certain situations. If a DHCP server is located on a different network segment than the client, the DHCP broadcast messages sent by the client will not be forwarded to the server.
The client sends a DHCP request message to obtain an IP address, but the request is broadcasted only within the local network segment and discarded on the first router (R1). The solution to this problem is called a DHCP relay.
A DHCP relay agent is deployed on the network where the DHCP clients are located. This agent (usually a router) receives the DHCP request broadcasted from the client and forwards it to the DHCP server located on a different subnet as a unicast message by including option 82. The DHCP server sends a response message to the relay agent, which forwards the response message to the client after stripping off option 82.
A relay agent is always the router of the local network and is configured by using the “ip helper-address” command and defining the IP address of the DHCP server. This command should be issued on the interface where the DHCP broadcasts are received, such as on interface G0/0 in our example.
To configure R1 as a DHCP relay agent, you need to configure the “ip helper-address 10.10.10.1” command. Once configured as a DHCP relay, the router starts functioning as a proxy for the DHCP communication between the clients and the server.