I'm sorry for bringing this here but this is the only place I can think of that would give legitimate answers. Mythology threads are dead from what I've seen, so the closest thing I can think that can provide feedback is D&D. I'm planning to make a fantasy story(as usual) and I wanted to know if this would sound good enough as a backstory for the elves.

Elves, a beautiful and elegant race that values nature over everything. In the past, they were just goblins. Highly fertile and has an extremely strong libido, only as strong as an average human. Because of their high reproduction rate, they had managed to almost take over a country and start their civilization. But unfortunately for them right beneath their land was a sleeping dragon. It woke up from its slumber because of all the noise from the goblin's war with other races. The dragon almost wiped out the entire goblin race. But some escaped into the forest and survived. Inside the forest, they made contact with the ents and treants, the residents of this forest. The ents became vigilant, for the fear of being invaded by the goblins. And the goblins fearing that the ents would fight them. The ents asked the goblins for their purpose and the goblins responded with their story, both agreed that it would be beneficial for the both of them to live together to survive. The treants knew they had the advantage, so they agreed to the pact but they had a condition. The goblins can live in the forest with the ents and treants in exchange for their lifespan. Without any other choice, the goblins agreed. Throughout the years both goblins and ents were at each other's neck, but that hostility came to an end when goblins evolved to have a longer life span to give some of it to the ents and save some for their selves. The ents and treants were granted the power to rejuvenate their surroundings with an aura to better the condition of the forest. They realized that they could finally live together in harmony. A million years have gone by and the goblins, with the aura of ents, became more nature-like, their appearance changed from green to a white and blemishing skin, they grew green hair to remind them of their past and their life span grew longer with the passing of years until they could live to a thousand years. The ents and treants became unified and learned the true nature of life, they had one mind and one body, the whole world depends on their existence, they had become a huge tree spanning over a hundred meters, with a height unimaginable to any existence, the goblins had called them "The world tree" and the world tree gave the goblins a new name, they recognized that the goblins they knew were no longer there and instead had become a new being, they named this species "elves" the people of the forest.

I'm not sure what you're looking for in a "legitimate answer," but this sounds fine to me. Kind of flips the Tolkien story on its head (where orcs were corrupted elves).

It's your world, so elves can be whatever you want. The important thing is to stay consistent within the boundaries you set with the backstory.

One other thing that separates "good" backstory from "tl;dr" backstory is whether it actually matters in your campaign. Is your campaign going to feature the relationship between elves, treants, and goblins? Will this information provide useful context or some kind of an advantage to the players when they learn it? If backstory is not useful or relevant in some way, many players will develop the habit of ignoring it. After all, they play to experience their story within your setting.

The first elves were formed from sparkles that condensed in a massive cloud of pixie farts. 

Or, if you want something official from WotC, I believe there are multiple canon lore texts across the various editions. I can't recall any details right offhand but I'm pretty sure Corellon had a lot to do with it, being king sparkly poobah of the elf gods and whatnot.