The Label Distribution Protocol (LDP) plays a crucial role in MPLS (Multiprotocol Label Switching) networks. It enables label switch routers (LSRs) to exchange label binding information, which is essential for supporting hop-by-hop forwarding in an MPLS network1.

LDP establishes LSPs (Label Switched Paths) that follow the existing IP routing table2. This process is particularly well-suited for establishing a full mesh of LSPs between all of the routers on the network2.

When a packet arrives at a router in an MPLS network, the router looks at the incoming label, looks up the label in a table, and then forwards the packet to the next hop1. This method of label distribution is also called hop-by-hop forwarding1.