Germinating with styrofoam

Hello hydroponics growers! I had posted earlier about germinating in cotton which led to fungal growth as I was unable to keep the stems dry using cotton (still experimenting and working on it). I tried using Styrofoam this time.

I am from India, and rock wool is pretty costly for hobby growers so I am trying to find an alternative medium. Styrofoam looks promising, but even after a week of planting seeds, there is no germination. I am using Italian basil seeds.

What was done-
1) Blocks of Styrofoam were cut (LxBxH = 1in x 1in x 1.5in) and a hole was made from the top (around 1/2in).
2) The blocks were wetted in weak hydroponic solution then placed on a dry surface to drain excess water.
3) Seeds were kept in warm water for around 30 minutes and then gently placed inside the Styrofoam. Two seeds per block of Styrofoam.
4) These blocks were kept in a sealed environment, in a dark place away from sunlight.

Questions –
1) I can see fungal rot on the seeds, which might be a sign of over watering? Should I just sprinkle water instead of wetting the blocks completely?
2) The holes are a bit deep (half an inch) , does that effect the growth somehow?
3) Did I just burn them with nutrients by keeping Styrofoam blocks in (weak) hydroponic solution before planting?
4) I did not use paper towel around seeds as suggested earlier (since I felt this works more or less similar to rockwool, and I treated it like one). Should I wrap them around seeds before placing in Styrofoam?

I will be really obliged if someone helps me understand the above scenario. Thanks in advance!