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A long time ago, a bad demon would terrorize children while they slept; One New Year, a child was given eight coins to play with to keep him awake, but he couldn’t keep his eyes open and eventually fell asleep with the coins on his pillow.
The demon appeared, but as he went to touch the child, the coins (actually the Eight Immortal Deities in disguise) produced a powerful light that drove the demon away.
And thus, the tradition of red envelopes was born, symbolizing good luck, prosperity, and protection from harm.