Its a common feature found in most renderers to save memory and speed rendering of complex scenes. But usually implemented differently. But, Yes, similar function as VRayProxy is to Vray.
Its quite simple idea really. Think of it as storing the mesh data of an object only once in memory, then referring back to it from every other time you want to reuse that same mesh / particle elsewhere in your scene. All you basically need at every other location is a X, Y, Z Location, Scale, and Rotation and any other info that is useful to your render pipeline / scene.
E.g., Rendering grass or trees. With the mesh and texture data of only 10 different blades of grass or trees stored once in memory, The renderer refers back to the original model each time, instead of copying it to every location thousands of times in your scene.
Here is an older, perhaps outdated article from Nvidia that better describes the basics, with pictures:
http://http.developer.nvidia.com/GPUGem ... ter03.html
maximum polygon count and texture size (10+ Gigabyte models)
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