Each node in a network potentially can become a gateway and start distributing IP addresses via DHCP on all active SSIDs (only gateways run a DHCP server). To avoid IP address collisions from the numerous gateways a network can have the dashboard has to send each node an identifier (so-called 'node id') from which firmware-ng will derive its unique (collision free) IP address space.
Firmware-ng divides the available 32Bit IP address space as follows:
<8Bit Class A net><14Bit network><10Bit host>
The 10Bit host part allow a maximum of 1024 simultaneous clients per SSID per gateway.
An example with a node id of '1':
As shown firmware-ng will start with the highest bits counting downwards to avoid IP collisions with the LAN as well. To further reduce the likelihood of LAN IP collisions firmware-ng gateways will compare their IP address space with the LAN's address space and can change to the 172.16.x.x address space in case of a collision.