QEMU-KVM storage allocation

Hello dear Fedora people, hope you all fine. I use Fedora 38 Gnome spin. I have a question regarding qemu-kvm, is there any way to create dynamically growing virtual disks rather than pre-allocated ones? When I create a disk I explicitly choose to not to use “allocate entire volume now” in VM-Manager but looks like I am missing something. I tried to find a solution but could not find it. I appreciate your help and thank you.

Probably the simplest method:

Keep in mind that thin provisioning can negatively affect guest performance.

Thanks for taking time and replying it but it seems it is not working due to the lack of “Max Capacity” option.

Max Capacity and Capacity should be the same, and the point is to use the qcow2 format that compresses unused virtual space and allows you to specify a capacity that is comparable or even larger than the free space on the physical disk.