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Proxy vs. NAT

Proxy vs. NAT
Most of the time 'proxy' refers to a layer-7 application on the OSI reference model. However, another way of proxying is through layer-3 and is known as Network Address Translation (NAT). The difference between these two proxy technologies is the layer in which they operate, and the procedure to configuring the proxy clients and proxy servers.
In client configuration of layer-3 proxy (NAT), configuring the gateway is sufficient. However, for client configuration of a layer-7 proxy, the destination of the packets that the client generates must always be the proxy server (layer-7), then the proxy server reads each packet and finds out the true destination.

Because NAT operates at layer-3, it is less resource-intensive than the layer-7 proxy, but also less flexible. As we compare these two technologies, we might encounter a terminology known as 'transparent firewall'. Transparent firewall means that the layer-3 proxy uses the layer-7 proxy advantages without the knowledge of the client. The client presumes that the gateway is a NAT in layer-3, and it does not have any idea about the inside of the packet, but through this method the layer-3 packets are sent to the layer-7 proxy for investigation.

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