The first demon in the world of Aetherus was Mugu. Well, that wasn't even a surprise, but at the same time Damon had thought Mugu would retain his humanity.
But it seemed he was the one who drove the goddess races of the Doom Continent into depravity, turning them into demons.
"Well that confirms that."
Demons were not a foreign species but natives that had been turned.
However, Damon also remembered Valarie saying something about demons being outsiders, or rather that some outsiders were demons.
The very first demon to exist didn't come from Aetherus, though the first demon in Aetherus was in fact Mugu.
Outsider Aetherus demons existed, and they were very powerful beings. Take the True Beings for example—some of them were called True Gods while others were called True Demon Kings, or True Demons for short.
If these boundlessly powerful demons existed, then how could more demons not exist?
Hell, the Unknown God was a bonafide demon himself.