They breed readily, but tend to eat their eggs or fry. I suggest pulling the eggs.
The best hatching setup I've seen is a fine net in a tank with a dinky sponge filter in the net. The uplift tube of the filter dumps water outside the net, so fresh water is always moving into the net.
The fry are really fragile, so don't keep them in a tank with significant water movement. Fry will die in the bursting bubbles from a sponge filter.
I have fed microworms and Hikari first bites.
Good luck!