Comment by sluongng

Zstd dictionary compression is essentially how Meta's Mercurial fork (Sapling VCS) stores blobs https://sapling-scm.com/docs/dev/internals/zstdelta. The source code is available in GitHub if folks want to study the tradeoffs vs git delta-compressed packfiles.

I think theoratically, Git delta-compression is still a lot more optimized for smaller repos. But for bigger repos where sharding storaged is required, path-based delta dictionary compression does much better. Git recently (in the last 1 year) got something called "path-walk" which is fairly similar though.