Abstract: A system and method for processing input/output (I/O) requests in a virtualized computer system. I/O requests are received from a virtual machine. A set of virtual I/O channels that may be interfaced with a host I/O stack and/or a virtual machine I/O stack adaptively queues requested data using a variety of I/O queue management modules. In one embodiment, the virtual I/O channels include an entropy detection module and a queue storage. The entropy detection module determines an entropy value of specified I/O request data and encodes the specified I/O request data with the entropy value within the queue storage.