Melo would waive his NTC if you traded him to a place of his liking. A team that is in the playoffs and a situation where he'd be able to compete for a title for the next 2 years. As much as he likes NY he won't choose to stay on a re-building team that is 2 years away if he can jump on a playoff team right away. The whole difference in free agency in 2014 was that Chicago didn't have the money to straight up sign him to a maximum. He also loved the Lakers presentation, but the Lakers are far worse than the Knicks even. In staying with the Knicks, he has the money he wanted and he can now get to a team that can give him what he saw in Chicago in 2014.
I don't think it's impossible to trade him,but it won't be easy. He'll have a short list, and of those teams they know that NY can only trade him a few specific places and the market will not be strong.
If it does ever come to a trade, I can see a trade with Chicago. McDermott, Mirotcic and Noah come to my mind. Noah is someone that gives us more capspace immediately. All 3 actually fit the Triangle pretty well, and McDermott/Mirotcic are young players that can become better. Chicago gets a core of Pau, Gibson, Melo, Butler and Rose together. Not a good trade for the immediate Knicks present though. Trading an all-star for no stars. But NY has to think about this, because it won't get better with Melo in terms of his physical decline. It'll only get worse.
However I wouldn't hate this team next year. If we can shed some salary with a Melo trade, Knicks could sign both Batum and Conley, possibly.
Rotation:
Lopez/Porzingis
Porzingis/Mirotcic
Batum/Thomas
McDermott/Galloway
Conley/Calderon/Grant
That's a playoff team in the East, and young with the ability to keep getting better as the core players aren't old, they are on their way up or in their prime.