I assume it's pretty slow, not on storage but on compute. x86 docker/podman on M1 must use QEMU software emulation, rosetta doesn't support x86 virtualization.

Behind the scenes, it's using QEMU with Alex Graf's patches for hvf (Hypervisor.framework) support, so it's Virtualization, not emulation. In other words, the performance is really good ;-)

BTW, in case you don't want to depend on a fork, upstream podman is going to gain M1 support (in the sense of 'podman-machine' knowing how to start aarch64 VMs with hvf) very soon.

Why do you think that it uses x86? I assume that it just runs ordinary ARM linux in VM which just works (I also don't really understand this title post, surely podman worked on ARM linux since the beginning).