A method of improving a data storage system includes dividing input/output (I/O) data into a plurality of blocks, and deduplicating the I/O data to produce deduplicated I/O data. The deduplication includes determining whether a first block is a duplicate block of another one of the blocks, and in response to determining that the first block is a duplicate block, replacing the duplicate block with a reference to the first block. The method determines whether the first block has a maximum overlapping area of duplicate data with a particular one of the blocks that is not a duplicate block, and replaces the particular block with a reference to the first block and to non-overlapping data.