Hello Firefox,
It could be a great thing to add a compact density option for vertical tabs in the "Customize sidebar" to reduce the spacing between tabs.
This would allow users with many tabs open to see more tabs at once and reduce the need for scrolling, while keeping the current spacing as the default.
For example :
Default
Also, I think the spacing between the icons in the horizontal toolbar at the bottom of the sidebar is too large. The spacing should adapt to the available width of the sidebar, allowing more icons to fit in the toolbar and making better use of the available space.