Dynamic terrain creation for 2d game

I am right now working on clone of Pocket Tanks.

For this game, I am stuck at dynamic terrain creation. In this game, when tank fires missile and landed on terrain then it destroy some part of terrain dynamically based on power of missile.

I think this game is well known to everyone so I don't have to explain much more about my question. I don't know where to start for this. If any ready made plugin available for this feature then also provide link for that.

Please help me and give some suggestions.

EDIT: I want this type of edge cut off.