The goal of Liquify is to provide the most efficient liquidity for any and all Radix native LSUs. If a Radix user holds LSUs but needs access to their XRD quickly, the two methods that are currently available to do this conversion are:

1) unstaking and waiting approximately a week to claim staked XRD.

2) Instant unstaking with Caviar LSU pool that comes with some slippage according to the state of the LSU pool and restrictions based upon what is allowed inside the pool.

Both methods leave areas for improvement either because they would have no access to funds for a week or would be unable to control the amount of slippage that could potentially be multiple percent of the total value of the unstake. Some LSUs are also unable to be unstaked instantly due to their fee structures (100% validators are not included in instant unstake as they would skew the pool).

Liquify consists of an orderbook that allows users to provide XRD liquidity to buy LSUs. An order would consist of an amount of XRD that a user is willing to spend on ANY LSU and a percentage discount from the face value of the LSU the user is comfortable purchasing at. No oracles are needed since there is no actual price being used, but only the actual XRD value of the LSUs which the Radix Engine knows. This book operates in a single direction: there are only limit orders for XRD to buy LSUs that are market sold into the liquidity. For the reverse direction, users can easily "buy" LSUs instantly by staking so this functionality is not needed from Liquify.

For example, User 1 can provide 100 XRD and specify that would buy any LSU at a 1% discount from face value. User 2 is in need of XRD liquidity and is holding LSUs currently worth 100 XRD. This user could market sell these LSUs on the Liquify platform and instantly receive 99 XRD back (1% discount). This would use 99 out of 100 XRD of user 1s liquidity. The liquidity provider also has the option to select whether or not fills would be automatically unstaked. If this option is selected, the unstake nft for each fill is stored within the component for the user to collect. If this option isnt selected, the LSUs themselves are stored for the user to collect.

I believe this platform can only be built with Radix because of the native validator components, LSU resources, and native fungible/nonfungible token definitions. Even as more new validators come online, it will work without a single modification because these standard components will exist in perpetuity. The Radix Engine will always know what resource is a valid LSU. I don't ever need to add any validators & LSU resources to "support" other LSUs because I can determine within Scrypto that a resource being presented to me to liquidate is, in fact, a native LSU.

Liquify treats every LSU equally. Any LSU can be liquidated on this platform and unstaked instantly because we can always know how much XRD these LSUs are worth after unstaking. The platform doesn’t even allow specifying which LSUs a user wants to buy because all LSUs are equal at the time of unstake regardless of fee structure, validator up time, etc. 100 XRD worth of LSUs = 100 XRD worth of LSUs at time of unstake. Right now, this allows at least 100 resources to be liquidated, but obviously as validators are added this will naturally increase until Xi'an when there will be a much greater need for LSU-XRD liquidity and many more LSU resources to deal with.

I think Liquify can also play an important role as being an option for LSU collateral liquidation for lending platforms. Because method calls on Radix are completely composable, it would be easy for a lending platform to check the liquidity of Liquify when determining how to dispose of LSU collateral.