Is Chara actually evil?

No, the short answer is no. The long answer is this.

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Now let's forget all the Fanart showing Chara being evil. Now before I start this answer, remember this sentence. "Chara actually used the real knife on someone."

So we know this from the beginning story. Chara fell from the surface to the underground and Toriel and Asgore adopted them. They and Asriel became siblings and they loved her family. Now, they loved monsters (Not Levels of violence), so they and Asriel tried to make a plan to free the monsters. Now, they found a way to release Asriel to the surface.

Now what they saw was truly horrifying. Their own people, their own race, the humans, killed their beloved brother. The people they were hoping would live in peace with the monsters actually killed their brother, just because he was a monster. Now, they lost hope, they were in despair. They had just lost their brother by their own race. They were mortified.

Now, remember I said that Chara did use the knife on someone. I think you might have a pretty good guess by now. If you haven't figured it out, I will tell you, they used it on themselves. They actually killed themselves. The monsters hadn't actually killed them, they killed themselves. That is why they had died. Chara is not a killer, they are a poor child who had seen and experienced a lot of things they shouldn't have, at least at their age.

Now, to those who think and believe that Frisk killed the monsters because they were possessed by Chara, that is just plain wrong. Chara never told risk to destroy anyone, it was frisk who chose to do it themselves. They were the ones who killed the monsters, not Chara.

Now, you might be wondering if the monsters didn't kill Chara, then why did they kill the other 6 who fell after Chara? Well, the answer is simple, they were afraid and seeking revenge. After they got to know that Asriel was killed by the humans, they were afraid that any other humans that come down would kill them. Along with that, they also seeked revenge. That is why they killed the others.

Now, after a genocide route, Chara wakes up. Why? because of the LV or levels of violence of Frisk. After killing those many monsters, they obviously had to have a lot of LV, enough to be able to sense it. So Chara's soul sensed a Human killer who had killed her beloved monsters, just like the ones who killed Asriel.

Now the final question that arises is, why does Chara offer the option to erase the world. Simple, because they had no one else in this world. First, they lost their brother, then their family and friends, and because of this they are alone and give the option to erase the world. If you actually think about the erase option, it doesn't mean that the world won't ever form again. It means it will form again, but the story, the timeline, everything will be erased and create a new story, a new world. That is why Chara gives the option to erase, in the hope of a new world to be formed where their brother, their family, and their friends don't die.

Now, you might be wondering after a genocide run, if you choose the option to not erase, why is there a jumpscare and why does it close abruptly, that is because it is either that they are crying or trying to give out an evil laugh before finishing you for good. Simple as that. Now if you are wondering that Chara's soul is determination, you are wrong. Her soul is the soul of Courage, a trait not seen in the game. And no, bravery and Courage are different.

Bravery: being able to do anything without fear. Courage: Being able to do anything even if you are afraid.

Chara obviously had the trait of courage because she was afraid to send her brother to the surface, yet she did it. She was afraid to kill herself, yet she did it. If her soul would have been the soul of determination, she wouldn't have killed herself. She would have continued to live on. As for why the soul color is similar, well, the answer to that is simply like the answer to why do the souls have a color in the first place. The answer, who knows it's just a game or plot mechanic.

Now a final question that is to be answered, How does Chara actually create the Erase option as it actually doesn't exist and why don't they press it themselves. I will go with the glitchtale answer, they just had enough determination, or actually enough courage to create the option. As for why they couldn't press it, well it's yet to be found but I think it would most probably be because there is a rule in Undertale that a dead person cannot press it I guess? I have no idea.

Now here's a bonus point that will show how Undertale and Deltarune are connected. Deltarune is actually Undertale after a genocide route. Now hear me out. I said if you erase the world, it will create a new story, a new timeline. That is what happened. Deltarune is what happened after Frisk decided to do the genocide route and after killing everyone and they chose to erase the world. In this new world, Chara's wish is fulfilled, their brother doesn't die, at least that's what happens in Chapter 1. Ralsei is a new character or a character we haven't met in Undertale, Susie is a Genocidal frisk who in this world is a girl and Kris is Chara. Yep. kris isn't frisk it is Chara. If any doubts, please comment.

Whether or not they (Chara) were evil or genocidal prior to the Genocide route I do not believe can be genuinely proven. However, their actions at the end of the Genocide route strongly suggest they are genocidal and are evil.

The definition of genocidal is "relating to or involving the deliberate killing of a large group of people of a particular nation or ethnic group." This is very deliberate; even if you state to not erase the universe, they proceed to do so anyways. This meets the definition of genocidal and goes well beyond it by killing all groups of people (and monsters) by destroying the universe instead of just one major group.

The definition of evil is "profoundly immoral and wicked." Destroying the universe and killing everyone with it (everyone but yourself and Frisk technically) is obviously profoundly immoral and wicked. The only way to restore the universe is to sell your soul; taking someone's soul is also evil.