I assume it would come from your discard pile else your spellbook else the larvae has no effect. I also assume the egg counter is double sided with the larvae counter.
It's a really nice flavoursome idea, more sci-fi than fantasy, hence more an extra-dimensional Mind creature than Dark. Unless you can recycle an Obliterated parent creature (out of the game means exactly that, surely?), it has no mechanical synergy or theme link with Dark.
However, from what we know so far, this will never see competitive play. If the Larvae dealt 1 direct damage in upkeep like Rot (it makes sense), then it would be perfectly costed. But this hasn't been communicated yet.
Here's hoping about the Rot because I really like the idea. I think this was Shad0w's idea (like Shaggoth Zura was Dada's idea).