Because the IP networks that the iSCSI technology uses to connect to remote targets do not protect the data they transport, you must ensure security of the connection. One of the protocols that iSCSI implements is the Challenge Handshake Authentication Protocol (CHAP), which verifies the legitimacy of initiators that access targets on the network.
CHAP uses a three-way handshake algorithm to verify the identity of your host and, if applicable, of the iSCSI target when the host and target establish a connection. The verification is based on a predefined private value, or CHAP secret, that the initiator and target share.
ESXi supports CHAP authentication at the adapter level. In this case, all targets receive the same CHAP name and secret from the iSCSI initiator. For software and dependent hardware iSCSI adapters, and for iSER adapters, ESXi also supports per-target CHAP authentication, which allows you to configure different credentials for each target to achieve greater level of security.