The Cup of Glory was a cup that enchanted those who saw and owned it to experience envy and rage.
According to legend, an ancient Norseman thought himself cursed, so he visited the Three Fates to change his destiny. They gave him three threads, which are said to represent people's lives. One represented glory, one represented envy, and the third represented rage, the result of combining the previous two.
The Norseman then used the gold from the threads to create the Cup of Glory, intending to create something which people would give anything to achieve its glory. Instead, the cup was cursed to invoke envy in whoever possessed it. This conflict sparked rage and misfortune, thus fulfilling the Norseman's destiny.
Discovery by Haldier
One day, while riding on his horse, Haldier the Blacksmith came across the snake, causing the horse to get scared. The horse bucked Haldier, causing him to fall into a pit, where the Cup of Glory was being held. Succumbing to the cup's curse, Haldier took the cup and wanted to ensure that nobody else could get to it, so he his it in the Old Mine which they use for the Virtue Challenge annually. However, Loki overheard Haldier talking to his horse about the cup, and devised a scheme to retrieve it himself.
When Loki, Thor, Sif, Brunok, Siegrold, and Hilda, joined by Fandral, Volstagg, and Hogun, went to the mine in order to retrieve nuggets of gold from, Loki snuck away to steal the cup, prompting a fight between the nine Asgardians. Thor used Mjolnir to attempt to claim the cup for himself, causing the top of the mine to collapse and the group to be trapped. Fandral told the cup's story to the rest of the group, and they resolved to bring the cup to Odin.
They were interrupted by Haldier, who stole the cup from the group. Haldier fought the group when they tried to take the cup back, but Thor managed to take it from him. Odin later destroyed the cup and sent it into the stars, for the pieces to never be reunited.
The Cup of Glory was enchanted to cause envy and rage for those yield it, even those with strong minds are helpless to it, not realizing they were enchanted.