Third-party next-hop concept appears only to distance vector protocol, or in the parts of the link-state protocols that exhibit distance-vector behavior. The idea is that a distance-vector update carries explicit next-hop value, which is used by receiving side, as opposed to the “implicit” next-hop calculated as the sending router’s address – the source address in the IP header carrying the routing update. Such “explicit” next-hop is called “third-party” next-hop IP address, allowing for pointing to a different next-hop, other than advertising router.
Intitively, this is only possible if the advertising and receiving router are on a shared segment, but the “shared segment” concept could be generalized and abstracted. Every popular distance-vector protocols support third party next-hop – RIPv2, EIGRP, OSPF and BGP all carry explicit next-hop value. Look at the figure below – it illustrates the situation where two different distance-vector protocols are running on the shared segment, but none of them runs on all routers attached to the segment. The protocols “overlap” at a “pivotal” router and redistribution is used to provide inter-protocol route exchange.
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