Liquidity Swap

A type of exchange used to make it easier for individuals to exchange assets for usable currency.

This term comes from central bank liquidity swaps -- which are used by a country's central bank to provide liquidity. The country’s central bank will provide its currency to another country's central bank in what’s called a liquidity swap

The lending central bank uses its liquid state currency to buy the liquid state currency of another borrowing central bank at the market exchange rate. The lender then agrees to sell the borrower's currency back at a rate that also includes any interest accrued up to that point on the loan. 

The borrower's currency serves as its collateral to guarantee that loan. 

In crypto, certain exchanges might perform a liquidity swap where they trade their reserves of USDT or other stable coins for other exchanges' liquid stable coins. They might also trade their reserves of their own token (such as Binance using its own BNB coin) for the stable coins or other coins belonging to another exchange. 

You can also perform a liquidity swap with another user by exchanging your USDT for DAI or other stable coin. Perhaps you think one stable coin will fluctuate more than the other  or perhaps you need one stable coin to trade with rather than the other. This would also be a type of liquidity swap.