An IP address is a digital address assigned to every website by the web hosting company. Normally, if someone has multiple domains, the person usually buys one hosting package to host all the 10 sites. Which means the IP address given to each website will be on the same network, like 184.108.40.206, 220.127.116.11, 18.104.22.168 and so on till 22.214.171.124. If the first 3 sub-sets of the IP match for different domains (in the example it is 195.183.40), it shows that the domains are on the same network.
Search engines check the IP address of every website linking to another site. If the first 3 sub-sets of both sites match, it means that the sites are on the same network and could be of the same owner. Therefore, they are not given so much importance.
Search engines started recording IP addresses of different websites and consider it a factor in checking the credibility of a website because links from different sites are important for a website. Webmasters started exploiting this by buying hundreds of domains at cheap rates, hosting them on the same server and linking all of them to 1 main site from all the other domains. So to avoid this, the search engines changed their policy from unique domain name to Unique Class C IP Address. Therefore, links from same Class C IP addresses should be avoided, and interlinking websites in a network of sites should also be avoided. If you do link your sites together, those links will not have a great impact on the rankings of the site and will not be considered as high quality links.