Lycan

Lycan are one of the five intelligent races that inhabit Remnant, they are undistinguisable from wolf faunus unless they show their true nature or the full moon force them too.

Early History
They were a secretive race that would always hide from the other species, only a selected few people knowing of their existence beside the grimms. It all started with the creation of Ozma's homunculus, one of his experimental homunculus was to expose wolf faunus ADN to the full moon energy Dust, the artificial faunus seeminly was born normal causing a big disappointment but as the homunculus grew up it became evident it wasn't a normal faunus, it was able to transform in a humanoid wolf that would give him extreme strength and speed, also a great sense of smelling. He was able to transform at will but lose completely control when exposed to the full moonlight. Dorian escaped during Dan's berserk that destroyed the whole place and killed all of the scientists and most of the other experimentss. As he was now free, he decided to hide and start a peaceful life for a while until he started helping Dan in the future. Unfortunately, he was given a very efective healing passive skill but not regeneration or a way to extend his life. He married a wolf faunus girl and their children got the Lycan gen.

Lycan-Vampire Conflict
Under Lanfear's command, the whole vampire army decided to exterminate the Lycan population after their leader rejected her offer to join force and destroy humanity and faunus. But thanks for the Vampires pride and their beliefs of superiority, they got defeated easily by the Lycans that even if they didn't have the same regenerative powers, they were far more strong, fast and intelligent. That would be a battle that none of the both races could forget since they had a lot of loses in both sides. The Lycan and the Vampires became deadly enemies ever since, but at difference of the Vampires, the Lycans weren't being hunted since they could survive with normal food instead of having to feast humans.

A tribe of Lycans tried to put aside their conflict and give shelter to a group of Vampires when they were being annihilated but that only resulted in the Vampires betraying them with a surprise attack and feeding from their corpses afterwards. When the other tribes found out about it started organized attacks to the few Vampire settlements that remained, almost leading the vampires to the extintion. Since that, the relation between the two races became even worse but at the end decided to just ignore each other's existence to don't disappear from Remnant.

Arise of Beacons of Darkness
Apparently in times of peace, Salem made her first move in centuries to get the world peace she had dreamed of, the one that could only be achieved by domination. With the help of the Beacons of Darkness led by her adoptive son Duncan Crystal got to form a new empire called the Shadow Kingdom in the Darklands and in just 5 years they had the most advanced kingdom and the only one with acces to the Dark Cross Continental Transmit System created by Allan Crystal which worked with Satellites.

Also, the group Dark Redemption got a partial control of the kingdom of Vale, while the Reborn group succeded in taking control of a part of Atlas. Meanwhile the Fallen Fang got more influence in most part of Menagerie and Vacuo; the Covenant worked hard on the improvement of their forces and represented a great support to the Beacons of Darkness. Normally the Hot Road used is immunity to traffic weapons or anything the Beacons needed.

Since all of the lycans were helping the Anti-Beacons Alliance, they were taken like traitors to the new world and Duncan declared they would be executed. In the first alternative ending, he is being convinced to spare their lives in exchange of them forgetting the conflict with the vampires (If the Vampires are still around) and agree with their new politics. In other alternative ending, he is being cinvinced to spare their lives in exchange to total alliance with the Fallen Fang and quit to their identity as Lycans and be a part of the Faunus group, besides survive the torturing Ian would carry out to correct their behavior. In the third alternative ending, they are executed in public while being transmitted to the whole world.

Modern Day (First and Second Alternative Endings)
Today, Lycans were forgiven for their crimes and were able to live in the Six Kingdoms without getting in problems with the other races, as long as they stay home during full moon thanks to accept the Beacons of Darkness' demands.

Thanks to the Beacons of Darkness' influence crimes and deaths had dropped drastically since everyone either respects or fear their new kings and authorities.

The world is said to be in an unprecedented state of peace, there are no racial tensions or crimes in their perfect world, the immoral practices had disappeared, as well as agitation from rebel groups.

The most poupulated kingdom by Lycans is still Menagerie even though the main kingdoms have noted an increase of the lycans population in their territories and the least populated by lycans is the Shadow Kingdom since the Vampires live there and they prefer to avoid unnecesary conflicts.

However they are forbidden to pretend being a normal faunus.

Biology
The Lycans can only reproduce if their mate is another Lycan or a Wolf Faunus. They have a really advanced passive healing ability that allow to heal any wound in a matter of minutes, or hours in case of broken bones. They are often called Werewolves but they have declared multiple times that the concept of werewolf doesn't apply to the Lycans since they can transform at will and keep total control over their transformation.

The reason of their powers and ability to transform is to the fact that the first one was exposed to the extremely hard to get Full Moonlight crystal dust, giving their kind a strange connection to the moon energy, they can also store that energy inside their bodies explaining why they can also transform during the day.