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Kobolds are more closely related to Dragons than Dragonborn are.
Kobolds used to rule a mighty empire, where they enslaved the gnomes and everything was going perfect for them.
Then Garl Glittergold decided to trap their god, Kurtulmak in a seemingly inescapable maze, and then collapsed a mountain on top of their imperial capital.
And that is why to this day, gnomes and kobolds hate each other.
One of his feats includes teaching himself divination magic, and then using that to locate precious ores and minerals which the kobolds used to build their great empire. It is said that he was so adept at doing this, that he managed to do the seemingly impossible... he satisfied the greed of his draconic masters, and convinced them to free his people as a reward for their exemplary service!
When Garl Glittergold imprisoned him, it was a devastating blow to not only the kobold empire, but also their morale. The reason why they are so keen on hoarding magical items, is because they're hoping that some day they might find a spell, ritual or artifact that can free their god and restore them to greatness.
You're welcome.
Just don't go looking into information about Steel Dragons.
Seriously, that is straight up, anime-fanfiction bull crap, and I shall not tolerate it in my D&D setting!
According to one lore video I found, Dragons used to be immortal, but they desired servants to cater to their greed and egotism.
Their god taught them a ritual that would allow them to create life, in exchange for them sacrificing that immortality; which is how the first Kobolds were created.
This is why Kobolds have such immense reverence for dragons and worship them as demigods, because the mighty creatures gave up immortality in order to bring them into existence.
Also, one ingredient needed for this ritual was a piece of the dragon's own flesh and blood, so the Kobolds are not exaggerating when they say they are descended from dragons.
Now that there would be cool
According to the PHB, one of the Familiar options you're supposed to gain access to with Pact of the Chain is a Pseudodragon.
But only Imp and Quasit is in the game right now.
They were, but Kurtulmak was so efficient at finding treasure to add to their hoards, that his creators agreed to grant the kobolds their freedom as a reward for their exemplary service.
That's how awesome he was, the only being in history to satisfy a dragon's greed!