High-performance computing in fluid dynamics frequently confronts substantial memory demands, especially in large-scale applications. Data compression techniques can alleviate these memory constraints, but introduce new challenges. This paper introduces an innovative on-the-fly low-overhead lossy compression technique tailored for GPU-based fluid simulations, utilizing the Discrete Wavelet Transform (DWT). Our approach significantly diminishes memory requirements, achieving up to a 10-fold long-term reduction on a D3Q27 simulation, while minimally impacting the simulation accuracy. The methodology is built around careful design choices to achieve a satisfactory compression ratio/speed trade-off. It effectively maintains mass conservation and accurately preserves essential discontinuities in simulations. Extensive testing with a D3Q27 Lattice-Boltzmann Method (LBM) simulation on a single GPU has shown that large-scale grids can be processed with minimal impact on the simulation accuracy and acceptable compression times. This compression technique demonstrates a robust capability to handle memory limitations in fluid simulations, opening the door to more complex and larger-scale simulations.