As one of the larger spirit dragons, Yugo is highly ambitious and quite narcissistic viewing mortals as tools to advance himself. He also views other spirit dragons as incomplete fragments and not true individuals. To some extent this is true as every spirit dragon is actually one of Shenlong's fragmented bits of personality.
Yugo was originally part of a far more ancient dragon named Shenlong. At some point, he was imprisoned inside of the giant catfish Namazu before escaping. At some point later, Shenlong was shattered into many other smaller spirit dragons. Shenlong immediately begun seeking out other spirit dragons to reunite and bring back his former self but was utterly stunned when many of the other fragments developed personalities of their own and rejected his ideas. One particular aspect of Shenlong called Yugo took a very aggressive demeanor. Feeling that his kin were starting to become wasted potential, Yugo begun devouring others of his kind, but even as he grew in strength, he was ultimately outnumbered and was forced to retreat to a cave in Crucible Mountain. After that, the rest of the spirit dragons scattered themselves as they believed that it was Shenlong's wish to stay separated.
Sometime after the Xeng Empire reached its height of conquests, Yugo awoke from a slumber deep in a mountain cave where a group of dragon riders had begun to bond with and worship the other native spirit dragons. With so many spirit dragons in one place, Yugo saw this as an opportunity and attacked, devouring many spirit dragons and killing many in the process. Yugo was simply too powerful for them, and their lifestyle was threatened with extinction.
The dragon riders, desperate for help, asked the nearby Xeng Empire for assistance with the crisis. However, the Xeng believed that the appearance of Yugo was due to a natural shift in the balance, and thus refused to intervene.
After a long, bloody last stand, the numerous villages of the dragon riders were destroyed, and the survivors were forced to flee beyond the mountains to the north. After that, Yugo returned to his hidden cave in Crucible Mountain
After Yugo had wiped out so many spirit dragons in one go, a group of Shuang Nomads had begun to worship Yugo as a god, and said nomads later became known as the Blood Lotus. Although Yugo generally viewed mortals as lowly creatures, he saw the Blood Lotus as an opportunity to expand his power and influence so that his dream to reincarnate as Shenlong would become a reality.