We perform electronic structure calculations for the recently synthesized iron-based superconductor LiFeO$_2$Fe$_2$Se$_2$. In contrast to other iron-based superconductors, this material comprises two different iron atoms in 3$d^5$ and 3$d^6$ configurations. In band theory, both contribute to the low-energy electronic structure. Spin-polarized density functional theory calculations predict an antiferromagnetic metallic ground state with different moments on the two Fe sites. However, several other almost degenerate magnetic configurations exist. Due to their different valences, the two iron atoms behave very differently when local quantum correlations are included through the dynamical mean-field theory. The contributions from the half-filled 3$d^5$ atoms in the LiFeO$_2$ layer are suppressed and the 3$d^6$ states from the FeSe layer restore the standard iron-based superconductor fermiology.