One embodiment of the present invention provides a switch. The switch includes a storage device, one or more line cards, and a control card. A respective line card includes one or more ports and forwarding hardware. The control card determines routing and forwarding tables for the switch, and comprises processing circuitry and a management module. The management module manage a tunnel or virtual network at the switch. During operation, the control card determine an event associated with layer-2 operations of the switch. The control card refrains from notifying the management module regarding the event and notifies a first line card in the one or more line cards regarding the event. The first line card then updates a layer-3 forwarding entry in the corresponding forwarding hardware based on the notification.