Variable packing in blockchain smart contracts means putting several small variables together into one storage slot to save space and gas. For example, three variables a, b, and c with sizes 8, 8, and 16 bits fit into one 256-bit slot. The execution table shows each step packing variables into slot 0. This saves storage because blockchain slots are expensive. If variables are too big to fit, they use multiple slots. Beginners often wonder why variables share slots; it's because their total size fits within one slot. If a variable is bigger, packing splits across slots. This method helps optimize smart contract storage efficiently.