The core is a star made up of the purest form of energy. it's mist alone is enough to keep a tech-knight going, and when condensed, crystallizes into a solid object.

The masked merchants in Haven are actually sages, the star's oldest inhabitants and of an origin unknown.
Upon finding the star with unlimited energy, the sages decided to make it their home.

It seemed like an eternity of paradise for them, increasing their intellect with time and their understanding of the universe.
Until, like most things that receive power, wanted more of it.

The eldest sage got into an argument with his apprentice for wanting more energy for himself. Being so sure of himself he challenged the eldest to a game of chess for the right of power. (The apprentice is a villain in the game and is only known by the pieces he plays throughout the clockworks, you see them as trojans)

Long story short the apprentice loses and is banished from the star, he swears vengeance on the elder and vows to return.

Knowing that he is not evenly matched against the elder and the rest of the council, he sinks to the lowest of the low for help. . The Devilite C.E.O. himself ???? who allies with the apprentice only because he is interested in harvesting the star's profit for himself.

War ensues, many lives are lost and the fate of the star is sure to fall into the devilite's hands.

The elder knowing what the power of the star could do in the wrong hands and foreseeing the inevitable outcome, decides to seal the core and hides the key where no one would find it. (The key turns up later after you crash land and can be found with Schemer Razwog who quickly recovers it after you gain possession of it)

The council knows that even if they die their bodies can be hacked, and their minds accessed for information. So they decide to upload all of their knowledge into an object no one would suspect. . .snipes. http://wiki.spiralknights.com/Snipes

Waiting until the time is right when a knight of pure heart will come and save the star.