Elder Races

The elder races are genetically and magically altered humans created by the inhabitants of the Yggdrasil system starting around the year 2000 SE. They included the elves, dwarves, gnomes, and orcs, as well as the species known as psionics.

Birth of the Elder Races
Yggdrasil's use of both magic and technology allowed them to accomplish feats that would be unthinkable in the rest of settled space. Like most of the rest of the galaxy, they had genetic engineering technology, however, it was not until around the year 1900 SE that they began experimenting with using magic to supplement this process. The first successes in this field occurred around 1950 SE, but they were mainly limited to simply inhuman increases in strength and intelligence, rather than the creation of new sub-species of human. Records of this time are scarce, but I believe that the creation of the first of the elder races, the elves, occurred sometime within 1990(2)~2010(2). Over the next century, the first orcs, dwarves, and gnomes would be created as well. While all four races are substantially different from one another, they all share an increased ability to connect to and work with the conduit.

Elves
The mages of Yggdrasil transformed themselves into the first elves in order to become closer to the conduit and thus be able to use stronger and more interesting magic. Unlike most human minds, the minds of the elves were not fully separate from those of the conduit. The edges between what was their minds and their thoughts blurred with the thoughts of the conduit and the minds of their fellows. This made them immensely powerful mages, but also caused them to become distanced from reality. As the population of the elves grew, they began to frequently live apart from the humans of Yggdrasil, creating their own towns and cities. The culture of these areas tended to be simple, yet hedonistic. The majority of the elves lived their lives without much care for anything other than their day to day enjoyment. Because of this, the original goal of discovering new magic using their increased connection to the conduit was, apart from a few exceptions, not successful.