Involved in isoflavonoid biosynthesis. Converts liquiritigenin to 2-hydroxyisoflavanone which spontaneously dehydrates to daidzein. liquiritigenin + O2 + reduced [NADPH--hemoprotein reductase] = (2R,3S)-2,4',7-trihydroxyisoflavanone + H(+) + H2O + oxidized [NADPH--hemoprotein reductase] (2S)-naringenin + O2 + reduced [NADPH--hemoprotein reductase] = 2-hydroxy-2,3-dihydrogenistein + H(+) + H2O + oxidized [NADPH--hemoprotein reductase] Belongs to the cytochrome P450 family.