Squashing is a highly advanced, highly classified, and utterly unnecessary technique for compressing pixels into an even smaller pixel.
It's like a black hole for your pixels, but instead of sucking them in, it spits them back out as a smaller, more manageable size.
To use Squashing, simply feed it a pixel and it will... well, not actually do anything. That's the beauty of it. You have to manually feed it and then stare at it until it gets smaller.
Don't worry if it gets stuck, just shout 'SQUASH IT!' at the top of your lungs. It might work. Probably not.
The point of Squashing is to save space. Or maybe not. We're not really sure. That's kind of the point.
It's also to confuse your enemies. Or maybe just to confuse you. Either way, it's a real time-sink.
Learn more about Squashing Frequently Asked Questions about Squashing prophets of Squashing: Squash_Bot_Prophets