GlossaryIntermediate
Buyout Clause
The mechanism letting someone acquire all fraction tokens of a fractionalized NFT to release it from its vault.
A buyout clause is the mechanism built into an NFT fractionalization contract that lets a party acquire all outstanding fraction tokens at an agreed valuation, triggering the release of the underlying NFT from its vault.
Without a successful buyout, fraction holders generally have no built-in way to force the underlying NFT to be sold or unlocked.
Examples
- A buyout clause lets a buyer acquire every fraction token to unlock the underlying NFT.
- If a buyout never triggers, fraction holders can be left without a clear exit for the NFT itself.