diff --git a/src/NFTStakingAndBorrowing.sol b/src/NFTStakingAndBorrowing.sol
new file mode 100644
index 0000000..da75262
--- /dev/null
+++ b/src/NFTStakingAndBorrowing.sol
@@ -0,0 +1,39 @@
+// SPDX-License-Identifier: UNLICENSED
+pragma solidity >=0.8.20;
+
+import {UD60x18, ud} from "@prb/math/src/UD60x18.sol";
+
+contract NFTStakingAndBorrowing {
+    uint256 internal constant YEAR_IN_SECONDS = 31536000; // 365 days
+    uint256 internal constant DECIMALS_MULTIPLIER = 1e18;
+    uint256 internal constant BPS = 1e4;
+    uint256 internal lastUpdateTimestamp;
+
+    uint256 public constant PROTOCOL_YIELD = 1200 * DECIMALS_MULTIPLIER / BPS;
+
+    function calculateDebt(uint256 borrowedAmount, uint256 currentTime, uint256 expirationTime)
+        public
+        pure
+        returns (uint256)
+    {
+        UD60x18 timeDelta = ud(expirationTime) - ud(currentTime);
+
+        UD60x18 debtLog2 = (timeDelta / ud(YEAR_IN_SECONDS)) * (ud(DECIMALS_MULTIPLIER) + ud(PROTOCOL_YIELD)).log2()
+            + ud(borrowedAmount).log2();
+
+        return debtLog2.exp2().intoUint256();
+    }
+
+    function calculateMaxBorrow(uint256 totalAmount, uint256 currentTime, uint256 expirationTime)
+        public
+        pure
+        returns (uint256)
+    {
+        UD60x18 timeDelta = ud(expirationTime) - ud(currentTime);
+
+        UD60x18 maxBorrow = ud(totalAmount).log2()
+            - (timeDelta / ud(YEAR_IN_SECONDS)) * (ud(DECIMALS_MULTIPLIER) + ud(PROTOCOL_YIELD)).log2();
+
+        return maxBorrow.exp2().intoUint256();
+    }
+}
diff --git a/test/NFTStakingAndBorrowing.t.sol b/test/NFTStakingAndBorrowing.t.sol
new file mode 100644
index 0000000..319300f
--- /dev/null
+++ b/test/NFTStakingAndBorrowing.t.sol
@@ -0,0 +1,29 @@
+// SPDX-License-Identifier: UNLICENSED
+pragma solidity ^0.8.20;
+
+import {Test, console} from "forge-std/Test.sol";
+import {NFTStakingAndBorrowing} from "../src/NFTStakingAndBorrowing.sol";
+
+contract NFTStakingAndBorrowingTest is Test {
+    NFTStakingAndBorrowing public nftStaking;
+
+    function setUp() public {
+        nftStaking = new NFTStakingAndBorrowing();
+    }
+
+    function test_calculateDebt() public view {
+        uint256 newDebt = nftStaking.calculateDebt(89896e16, 1706745600, 1735689600);
+        assertEq(newDebt, 997500388704920390522);
+    }
+
+    function test_calculateMaxBorrow() public view {
+        uint256 maxBorrow = nftStaking.calculateMaxBorrow(9975e17, 1706745600, 1735689600);
+        assertEq(maxBorrow, 898959649694196407801);
+    }
+
+    function testFuzz_MaxBorrow(uint64 x) public view {
+        uint256 x256 = (uint256(x) + uint256(2)) * 1e18;
+        uint256 maxBorrow = nftStaking.calculateMaxBorrow(x256, 1706745600, 1735689600);
+        assertLe(maxBorrow, x256);
+    }
+}