have you tried zram? it's super lightweight and built right into the kernel - perfect for systems with limited memory and you can tune the compression algorithm to balance between cpu usage and compression ratio.
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As far as i know zram is only for compressing ram, it's not meant for disk storage and is not block device mapper.
only problem with this is that VDO is heavy on memory.
Sounds like there are some tunable levers on memory usage, though I expect that you'll probably have a performance tradeoff.