3.5 Brick Liquidation

As we have already seen when applying for brick issuance, there are two main types of liquidation. The sale liquidation distributes the profits generated by selling the underlying asset to a third party. The purchase liquidation method is where the brick issuer repurchases the original NFT, and the purchase price is distributed to the brick holders.

Meaning of Liquidation

Liquidation Type		Key Stakeholders
	NFT Initial Holder (Brick Issuer)	Brick Holder (Trader)	NFT Vendor (Creator or PJT Team)
Sale Liquidation	Final realization of IBO revenue	Market profit Brick liquidation income	Additional royalty Fundraising
Purchase Liquidation	Original NFT value increase Final realization of IBO capital gain capital gains

Bricks expire by liquidation. The market wants bricks to be continuously traded in the exchange. Still, on the other hand, there is a need to confirm the realization of the value of the underlying asset or the actual underlying asset. It goes through a cycle of creating underlying assets, enhancing market value through the issuance of bricks, and realizing value through liquidation. Since assets generally have long-term retention properties, their values can be renewed, and this cycle can be continued. In other words, by repeating the value realization process, liquidation, a final process of value realization, enables the underlying asset to be traded on the brick exchange again.

After all, maturity liquidation is the final stage of value realization and can also be said to be the starting point of new value realization.

Sale Liquidation

It is a method to prepare liquidation profits by selling the original NFT at maturity liquidation. Although the subject of sale and settlement is the original NFT asset owner (initial holder), the implementation is made by entrusting the brick exchange (XBRIK) to the initial holder.

The sale liquidation is most likely to be exercised when the price of the original NFT is expected to be greater than the underlying NFT asset value, initial offering price, or market capital.

Purchase Liquidation

In the case of maturity liquidation, the initial holder purchases all of the amount equivalent to the total market capitalization of bricks as of the transaction's closing date. Similar to sale liquidation, the subject of liquidation and settlement is the initial holder, but the implementation is carried out by entrusting XBRIK to the initial holder.

The purchase liquidation is highly likely to be exercised when the price of the original NFT is less than the underlying NFT asset value, initial offering price, or market capital.