Proxy address resolution protocol (ARP) allows physically distinct networks to appear as if they are a single, logical network. This technique provides connectivity between these physically separate networks, without creating any new logical networks and without updating any route tables.
Proxy ARP allows systems that are not connected to the LAN to appear as if they are. When a system on the LAN wants to send data to one of the remote systems, it will do an ARP request to request the MAC (medium access control) address of the target system. When the iSeries™ server sees this request, it will reply to the request with the remote system's MAC address. Conversely, the system that requested the ARP will send it's MAC address to the iSeries server. The server will then forward the data to the remote system only if IP Forwarding is set to *YES.
If you apply the above scenario in terms of OptiConnect, consider the following scenario: