This setting selects which underlying signaling/encapsulation mode the device's MPLS L2VPN feature uses: pwe3 (the newer, standards-based Pseudowire Emulation Edge-to-Edge approach), martini (the older draft-martini style encapsulation it evolved from), or unknown. An administrator selects the mode that matches what the rest of the MPLS L2VPN network, including remote provider-edge routers, is configured to use, since a mismatch here would prevent pseudowires from establishing correctly between devices. For example, an administrator integrating this device into an existing network built around draft-martini pseudowires would set this to martini(2) to match the rest of the deployment.