I am using an Ubuntu Server 18.04.2LTS and I want to try to make it as a ppp server in order to study the protocol a bit better via wireshark.

The idea is to use virtualbox and use virtual machines as the following diagram shows:

Each Vm connected into the Vm using the "Internal networking" configuration over their virtual network card. In othr words I am running the following vms:

$ VBoxManage list runningvms
"Ubuntu PPP Configuration" 55314243-8b75-4a46-a8fa-9e371a63bd7f <<<< ppp server
"ubuntuVM pppclient" bf57df72-5ae8-406b-b364-4eec324e7cac <<< pppclient

And each of one have the following network cards:

• PPP Server

 VBoxManage showvminfo 55314243-8b75-4a46-a8fa-9e371a63bd7f | grep NIC
NIC 1: MAC: 080027DACEE9, Attachment: NAT, Cable connected: on, Trace: off (file: none), Type: 82540EM, Reported speed: 0 Mbps, Boot priority: 0, Promisc Policy: deny, Bandwidth group: none
NIC 1 Settings: MTU: 0, Socket (send: 64, receive: 64), TCP Window (send:64, receive: 64)
NIC 1 Rule(0): name = Rule 1, protocol = tcp, host ip = , host port = 2022, guest ip = , guest port = 22
NIC 2: MAC: 0800277B9E7B, Attachment: Internal Network 'intnet', Cable connected: on, Trace: off (file: none), Type: 82540EM, Reported speed: 0 Mbps, Boot priority: 0, Promisc Policy: deny, Bandwidth group: none

• PPP Client

VBoxManage showvminfo bf57df72-5ae8-406b-b364-4eec324e7cac | grep NIC
NIC 1: MAC: 080027D07155, Attachment: Internal Network 'intnet', Cable connected: on, Trace: off (file: none), Type: 82540EM, Reported speed: 0 Mbps, Boot priority: 0, Promisc Policy: deny, Bandwidth group: none
NIC 2: disabled

On the PPPoE client machines runnind the Default Desktop variant of Ubuntu 18.04LTS I have installed the "pppoeconf" package and I try to connect over the ppp server using the chap method ( just to study the network connection via wireshark into the host ) but I have this 2 issue:

Hence, I wanted to know whether the inteface connecting via PPPoE should have an IP first or no. If no how I can enforce the pppoeconf to use the default interface and connect into the ppp server that I setup?

For the record my ppp server runs and is already working as route -n command shows:

Destination Gateway Genmask Flags Metric Ref Use Iface
0.0.0.0 10.0.2.2 0.0.0.0 UG 100 0 0 enp0s3
10.0.0.0 0.0.0.0 255.255.255.0 U 0 0 0 enp0s8
10.0.2.0 0.0.0.0 255.255.255.0 U 0 0 0 enp0s3
10.0.2.2 0.0.0.0 255.255.255.255 UH 100 0 0 enp0s3

The ppp server is manually compiled using this source code over ubuntu 18.04LTS server. On it my /etc/ppp/pppoe-server-options I have setup the following settings for pap authentication (just to see how it works):

# PPP options for the PPPoE server
# LIC: GPL
debug
plugin /etc/ppp/plugins/rp-pppoe.so
require-pap
login
mtu 500
mru 500
ktune
proxyarp
lcp-echo-interval 10
lcp-echo-failure 2
nobsdcomp
noccp
novj
noipx 

Edit 1

For my ppp client I removed any /etc/ppp/hosts/* file then I used as this answer in order to configure it. Still fails to connect. Do you know how I can debug it?

Furthermore, in the current connection I also have set the only ethernet interface that will use pppoe as well as parent.

Also, my network interfaces onto the client are via (sudo nmcli show command):

GENERAL.DEVICE: enp0s3
GENERAL.TYPE: ethernet
GENERAL.HWADDR: 08:00:27:D0:71:55
GENERAL.MTU: 1500
GENERAL.STATE: 30 (disconnected)
GENERAL.CONNECTION: --
GENERAL.CON-PATH: --
WIRED-PROPERTIES.CARRIER: on

GENERAL.DEVICE: lo
GENERAL.TYPE: loopback
GENERAL.HWADDR: 00:00:00:00:00:00
GENERAL.MTU: 65536
GENERAL.STATE: 10 (unmanaged)
GENERAL.CONNECTION: --
GENERAL.CON-PATH: --
IP4.ADDRESS[1]: 127.0.0.1/8
IP4.GATEWAY: --
IP6.ADDRESS[1]: ::1/128
IP6.GATEWAY: --
IP6.ROUTE[1]: dst = ::1/128, nh = ::, mt = 256

In order to find out what happend on the ppp server ssh into it and then run:

tail -f /var/log/syslog

And you will see what happens. By default, the pppoe connections need no dhcp, but you need to provide DNS servers as well. In the ppoe configuration is missing thus append with the following:

ms-dns 4.2.2.1
ms-dns 4.2.2.3
netmask 255.255.255.0
defaultroute
noipdefault
usepeerdns

For privacy you can use your own dns entries (or even setup a full caching dns into your system) by changing the values of ms-dns entries.

For any authentication issue have a look upon: https://serverfault.com/a/969667/369198