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Ten thousand years ago, during the reign of the night elf Queen Azshara, there was an elite magic-using sect known as the Highborne, who dabbled in magics that many other elves considered heretical by drawing upon the power of the Well of Eternity. Several centuries after the Sundering, which destroyed the Well of Eternity, the Highborne left Kalimdor and settled on the Eastern Continent, founding the kingdom of Quel'Thalas. They became known as the high elves. During this time, they created the Sunwell, and switched to a diurnal waking cycle, instead of the nocturnal cycle they had kept when they were night elves. Their purple skin eventually faded to a pale peach color, like that of the humans and dwarves.The high elves assisted the Alliance of Lordaeron in the Second War against the Horde and in the fight against the war against the Burning Legion. During that conflict, however, Prince Arthas led his army of the undead against them, ravaging Quel'Thalas and corrupting the Sunwell. The high elves were nearly wiped out in the conflict. In remembrance of their fallen brethren, many renamed themselves the blood elves, or Sin'Dorei, and swore to avenge their fallen race.
Cut off from their source of power once again, the elves went into magic withdrawal. Desperate for aid following the Third War, the blood elves accepted help from the naga. This was seen as treachery by the Alliance and they were sentenced to death. Prince Kael'thas Sunstrider led his followers to freedom, to the extra dimensional wastes of Outland, the remnants of Draenor, to pledge allegiance to Illidan who promised to grant them a new source of magic by siphoning the chaotic energies of demons. Together with their allies the naga, Illidan led the blood elves to conquer Outland, gaining in the process the friendship of the nearly extinct draenei.
The blood elves then followed Illidan to the Icecrown Glacier in an attempt to destroy the Lich King, however, their plans were foiled by Arthas who wounded Illidan forcing the allied blood elves and naga to retreat, allowing Arthas to ascend the glacier and merge with the Lich King.