My good friend is a compulsive liar what can i do?

[marshlander]

I think it would be important for you to be able to retain some measure of reality in all this make-believe. As long as you can do that your continued friendship might help boost his confidence, specially if he can be made to see that you know he is lying and that he doesn't need to lie to be assured of your friendship.

If, however, you find your own grasp on the truth becoming unsettled you may need to withdraw.