Let's come up with an amphibian race!

217th year. Kronn was killed by one of the rebels, but his son, Terenn, firmly took control.
223rd year. The Dark Elves made their first attempt to descend underwater, but it was unsuccessful. Development of new magic for underwater travel began.
225th year. Fearing new raids by the Elves, Terenn attempts to enter the Dungeon.

Added 4 minutes later
By the way, we need to come up with a symbol for the faction. I suggest an octopus wrapping its tentacles around a ship. Or a statue of Neptune entwined with seaweed.

You came up with a great idea about the Dark Elves! You logically connected the departure of the Hydras from the water and their encounter with the Dark Elves! Now, you can say that the underwater race and the Dark Elves are bitter enemies. Regarding the symbol... you actually already mentioned a kraken entwined with seaweed. This structure will appear in castles upon finding the Grail and will allow you to emerge from the water at any level, as well as move on land at the same speed as underwater. We talked about this, and that's good.