We just shipped an internal update to smooth terrain that reduces the rendering memory impact for both terrain and water by ~40%. This has no effect on voxel storage (so no effect on server memory).
Hopefully this does not result in any visual bugs - if you notice terrain missing or small gaps between chunks of terrain or anything of the sort please post a message here that includes a screenshot of the issue and the computer specs.
For big terrain reducing memory can improve performance as well since more data will stay resident in VRAM + vertex processing on GPU will be faster due to less cache misses. On some workloads there is no performance gain depending on the terrain and hardware.
LOD is still in progress and will provide a better solution but I wanted to ship this first since I like noticeable constant-factor improvements.