well i have heard that turbos can spin up to 100,000 rpm.
of course if you over spin it that's bad too. How that happens i have no clue (i bet arnel does). There's also a point where the tip of the compressor vane reaches the speed of sound and that's bad too.
and don't make the inlets/outlets bigger. The company that made the turbo knows more than you, they made it that size for a reason. And water cooling is pretty simple. Just uses the coolant from the engine in another closed chamber of the turbo to cool it. Pretty basic. Some have it, many don't. To me it looks like another thing to hook up (and potentially break), but if it works then i guess its worth it.
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