Systems, methods, and non-transitory computer-readable storage media for dynamic addressing of virtual port channels is described. In some implementations, a virtual IP address can be dynamically generated based on which links in a virtual port channel are active. If the numbers of active links in the virtual port channel changes, the virtual IP address can be dynamically changed. The virtual IP address can be dynamically adjusted by changing the values of individual bits in the virtual IP address that correspond to links in the virtual port channel. The virtual IP address can be used as a tunnel end point address in a VXLAN environment.