Selkies are described in Lodestar as long, seal-like creatures found in several remote areas in the Lost Cities, such as Inktide Island. When they shed their skin, it melts into puddles of bad-smelling liquid, which is used for many obscure purposes, such as dehydrating and feeding to tredgeons, who find the smell irresistible.
Selkie skin can be used to make medicine, as mentioned in Flashback.