According to Stefan Bondy of the New York Daily News, Nets GM Billy King wants to keep Wallace around for a while.
Wallace has until June 13 to decide if he'll pick up his one-year player option worth $9.5 million. Until that date, the Nets can sign him to a two-year extension on top of the one-year player option.
If Wallace chooses to opt out, he'll become an unrestricted free agent in July and then the Nets can sign him for a maximum of five years.
Brooklyn shouldn't even think about extending Wallace's contract and just hope that he opts out of his current deal.
Going the extension route, Wallace would earn his one-year player option cash next season and then receive seven percent raises the following two years.
It would be better for Wallace to sign a five-year contract because he would make less money per year, giving the Nets more cap space to spend on other free agents.
Superstar point guard Deron Williams, of course, is the Nets' biggest free agent this summer.
Other notable free agents for the team include center Brook Lopez, as well as forwards Kris Humphries and Gerald Green.
In the Wallace deal, the Nets sent Mehmet Okur, Shawne Williams and a first-round draft pick (top-three protected) in this year's draft to the Portland Trail Blazers.
Wallace would appear in 16 games for the Nets this season, averaging 15.2 points and 6.8 rebounds per game.
If Wallace goes elsewhere in the offseason and the draft pick ends up becoming a star, the Nets will be known for making one of the worst trades in NBA history.
With that said, it's imperative that the Nets bring Wallace back. However, it's just best if they don't give him an extension, but a contract which is cheaper annually.