A man can only have one Rock Wife, who is bound to him for life — land, wealth, children, and house. Basically this is a “legal wife”.
A Rock Wife has to be a woman originally born on the Iron Islands.
The number of Salt Wives a man can have is unlimited — whether noble or not, since any man with a ship is considered the king of his ship.
The more salt wives a man has, the more in general he is considered wealthy, skilled at reaving, and full of virility.
Only a Rock Wife can share the household bed and table with the husband, and her children come before all children made by Salt Wives. Very primitive social biology here, but as much as modern humans don’t want to admit it, this is how nature works for almost all species of ape — a woman will always make sure her children are more taken care of than children from another woman that the same male has mated with.
Salt wives disallowed from bed and table are a way to set the line in terms of social hierarchy.
Your genes with your Rock Wife take priority, but the genes of the overall species still get to multiply via Salt Wives. In the end it’s all about preserving genes themselves and the species at large, as genes are indifferent to social customs, LMAO. This agreement is a way for maximum gene reproduction, as it benefits Rock and Salt wives in having their children reach reproductive age in mutual benefit.
Salt Wives are considered more than just whores — they get legally married by the Drowned Priests, and if no children are left from the Rock Wife, children from Salt Wives can inherit everything from their fathers.
Aegon I put a halt to the reaving and Salt Wife tradition,outlawing stealing women and raiding the shorelines.
Still, the ironborn sporadically return to the “Old Way” when given the chance, though it has been significantly tempered the last 300 years.
Balon Greyjoy’s promise to restore the Old Way stems from Aegon I legislating against it.
Daniel's Backup of 20 years of ASOIAF Historical Analysis 