Ages ago, there was a conflict between the Olympian and Japanese Gods. Both Zeus and Amatsu-Mikaboshi asked the Blacksmith to forge great weapons for them that would help them win the war.
The Blacksmith forged two swords: Kusanagi or Grasscutter for Amatsu-Mikaboshi and Godkiller for Zeus.
Grasscutter was given to Phobos, the god of fear, by Amatsu-Mikaboshi which Phobos used to kill his own father. The blood of Ares stained the blade red.
Ares gave Phobos his sword back upon his judgement to be a true god, Phobos now wields the sword as a member of Nick Fury's Secret Warriors.
Phobos used the sword to slaughter the secret service in his quest to teach the President of the USA a lesson after the death of Ares during Siege.
In an intense battle, Phobos with the Grasscutter faced off against Gorgon who possessed the legendary sword's counterpart: the Godkiller. Phobos was killed in battle.