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The Hylotl are inspired by Asian culture, mainly Japanese influences. The clothing they wear uncannily resembles a Kimono. The Hylotl are a peaceful race and are vegetarians. According to the Starbound Codex, the player (if they choose to be a Hylotl) is a Hylotl missionary.
In the past Hylotl had wars with the Floran. Eventually the Floran drove the Hylotl out of their planet, and therefore the Hylotl hate the Floran. This is also hinted at when you talk to a Floran NPC as a Hylotl or talk to a Hylotl NPC as a Floran: they will say various things, which are usually negative. An example being "We don't want your fish kind around here" (Floran to Hylotl).
During a poll, Tiy asked if players wanted a robotic race or an underwater race.. Due to an overwhelming response for both choices, both species became races of their own. originally, the Hylotl were able to breathe underwater without equipment, but this has since been removed.
Sadly there are no current Hylotl dungeons.
 NPC villages
Hylotl sometimes live in villages and have items that are influenced by Asian culture.
 Gameplay effects
If the player chooses to be a Hylotl, certain things are different:
- The racial effect is armor that can help you breathe underwater as well as swim faster.