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I thought it was Tailscale that always selects which IP to use as endpoint for other devices, and set that up for Wireguard? If I'm wrong, could I replicate that behavior (using relay on WAN, direct connection on LAN) with Wireguard without external configuration tools?

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Hmm, yes, I think you’re right. Tailscale does handle the connection here, not Wireguard.

I’ve digged into it a bit and I believe it first connects over a relay, then the devices try to find a more optimal route. So for LAN, they would exchange their local IPs and try to connect over those. If they are indeed on the same LAN, they connect directly: https://tailscale.com/kb/1257/connection-types

This is not without issues, however: https://github.com/tailscale/tailscale/issues/7206

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