https://github.com/mhx/dwarfs
Please try to put some text into bug descriptions. I assume you're proposing that releng moves to it -- have you tried it? any measurements? ...?
I tried as a user, and read comparison on the README. Yes, I am about live USB images.
Maybe the creator of DwarFS will try to repack https://github.com/mhx/dwarfs/discussions/250#discussioncomment-12377664
Looks like much smaller with DwarFS: .rw-r--r-- 2,967,098,279 root root 3 Mar 20:47 gentoo-live-l9.dwarfs .rw-r--r-- 3,280,601,562 root root 3 Mar 20:36 gentoo-live-opt.dwarfs .r--r--r-- 3,845,120,000 root root 16 Feb 21:50 gentoo-live/image.squashfs
The results look promising, was a PoC build of the ISO also made to show it works as well as the current system? I can't speak for Gentoo, however patches to add this as an option would at least be something I could see a use for if it works as advertised.
Assistance needed, can you please share some wisdom here about ISO building? https://github.com/mhx/dwarfs/discussions/250