It’s the final state that the peer that initiates the “active close” ends up in and this can be either the client or the server. its a state that some sockets can enter and remain in for a relatively long length of time, if you have enough sockets in TIME_WAIT then your ability to create new socket connections may be affected and this can affect the scalability of your client server system.

PFA more reference http://www.serverframework.com/asynchronousevents/2011/01/time-wait-and-its-design-implications-for-protocols-and-scalable-servers.html

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