The Perimeter of Asgard, soon after the creation of Middle-Earth and Valhalla, during a single winter

Let's set the scene. The gods have already created Middle-Earth and Valhalla, which is a good thing, because these put some space between Asgard (the land of the Aesir gods) and Jotunheim (the land of the giants). But the gods are a bit paranoid. They're worried that a particularly crafty giant (called a Jotun) will somehow make his way through two other worlds, across the rainbow bridge, and into Asgard.

That's why they're so eager to take the mysterious stone-mason up on his offer to build a gigantic wall around Asgard. With the protection the stone-mason proposes, the gods are convinced they'll never have to worry about a giant-invasion ever again. What they don't realize is that, by accepting the stone-mason's offer, they're inviting a giant into Asgard. Oops.

The stone-mason (who by now we realize is really a giant) promises to complete his work in a single winter. His work must be finished by the first day of summer, or else he won't be paid. Summer was the time for outdoor projects in medieval Scandinavia because, during the winter, the ground was covered in snow and ice, making building basically impossible. In other words, it's seriously impressive that the stone-mason is able to build the wall during the winter.

When the stone-mason begins construction of the wall, he uses his horse, Svadilfari, to move stones so large that even the gods can't believe he's doing it. The perimeter of Asgard must sure be a pretty rocky place.

Asgard also has a thick forest nearby, out of which the beautiful mare (really Loki in disguise) emerges to seduce Svadilfari away from his work. It's in that forest that Sleipnir is born. It's common in medieval stories, and in fairy tales today, for the forest to be a magical in-between place where mysterious happenings go down. Even in the world of Harry Potter, the Forbidden Forest is extra magical. When you think of it that way, it makes sense that the forest is the place where the shape-shifted Loki and Svadilfari have their fling, and where Sleipnir the magical eight-legged horse is born.

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