squashfs-portage
            <https://github.com/Neuvoo/squashfs-portage>

Squashfs-portage adds the capability to have squashfs-based portage tree.  This
is intended mostly for embedded devices and machines with low data capacity,
limited writing capability, limited internet connectivity, and/or filesystems
with low inode count. This software is primarily intended for the Neuvoo project
but provided as a eventual drop-in replacement to Gentoo rsync for updating the
portage tree.

22/08/2012 - At this time you must use a patched version of portage found at the
Neuvoo overlay to utilize this function with a Gentoo-based system.  The patches
have been send to Gentoo devs for eventual inclusion to standard portage.
<https://github.com/Neuvoo/overlay>