Voting in circles are not the norm on Hive, but I see this happen more often on the L1 blogging platform than on Leo, which is a layer 2. This is one of the main reasons that drove me to delegate my HP to @leo.voter and stack more Leo.
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If the users who receive rewards from their posts trust and commit to the Leo platform, and the whales don't distribute inflation with votes to accounts that will just sell the tokens after 7 days, the long term value of Leo grows.
Healthy token distribution is key for a project to be sustainable in the long run. Token distribution via inflation allocated through votes is a good strategy, the more token holders you have, & the bigger your middle class is, the better.
The key for this type of distribution is to have a community that wants to stack the tokens, and not just sell them when they receive them, effectively making Hive or Leo a cash cow for other investments or perhaps even daily expenses.
What good is it to have a good distribution system if the tokens will end up in the market & create sell pressure, extracting value from the token
For a Proof of Stake based blockchain, having more token holders means more decentralization
I read a lot about the past of Hive. Getting rid of the pre-mined stake from a centralized entity was a good move, but distributing the inflation correctly is as important. You don't want your inflation to end up in the market after 7 days.
You actually want to distribute this inflation to users who are in here for the long run, who believe holding $hive and $leo is better.
What good is to stack tokens via voting circles if only you & your friends hold said token long term.
An ecosystem as complicated as Hive/Leo needs to have users who are here for the long run, & reward their posts instead of posts form those who are here for the present rewards, who sell your ecosystem's inflation at the 1st chance they get