He was originally a worker at the fair who wore a dragon costume to entertain kids. The boss had always wanted a pet dragon and brainwashed Otto into believing he was a real dragon. His main attack is his fiery dragon breath, most of which can be attributed to his bad breath and body odor from being trapped in the costume for too long.
Each mastery level adds another card to the cardpool for defeating Otto. Each of the bronze, silver, and gold mastery levels unlocks a new card, while it takes all three diamond and onyx levels to unlock a single card.