Terrain: Why are the edges of my pond so blocky?

Why are the edges of my pond so blocky?
I just created a simple circle and smoothed the edges. Why does it look like that?


OK, I think I figured it out. My water was set to y = 30, but my land around it was also set to y=30.
The fix was to set the land around it to 31 and then smooth it out.
Looks better now.