When a router that is directly connected to the final destination receives the packet, it delivers the packet directly to the end host. The IP routing table contains either subnet routes or major network routes. Each route has one or more directly attached next hop address. Subnet routes are aggregated or summarized by default at major network boundaries in order to reduce the size of the routing table. Let's consider assigning IP addresses to the interfaces of a router using a class B network that had been subnetted using eight bits of subnetting.
Every interface requires a unique subnet.
In this way, address space is conserved. A router receiving a routing update installs the source address of the update as the next hop in its routing table. Normally, the next hop is a directly connected network node. When IP unnumbered is configured, routes learned through the IP unnumbered interface have the interface as the next hop instead of the source address of the routing update. Thus we avoid an invalid next hop address problem due to the source of the routing update coming from a next hop that is not directly connected.