It's quite a difficult problem because it needs to be high performance, and doesn't allow for a static world structure which is what most engines are optimized towards. A Minecraftish "poxel" (objects generated from voxels) approach would probably be best, but is crazy heavy on both memory and requires frequent geometry…
Have a look at these vids: [ame=" https://www.youtube.com/watch?v=OSmlrPcXumc"]StarForge - Early Alpha Video - YouTube[/ame] [ame="https://www.youtube.com/watch?v=zWQl_Fpr9Gk"]Io -Indie 3d platformer- Voxel Level Editor - YouTube[/ame] [ame=" https://www.youtube.com/watch?v=Rc1ztktWxJs"]Voxel terrain engine - work in…