Loki, the son of Odin, desired to become king of Asgard and prove himself to his father after years of living in Thor's shadow. As part of this plan, he allowed a team of Frost Giants to enter Odin's Vault. Three Frost Giants killed the guards of the vault and acquired the Casket.
This means that Odin must have used a formal spell on Loki, which did not require constant magical upkeep. The spell was permanent, making it so Loki only reverted to having blue skin when touching a Frost Giant or one of their artifacts.
Loki Laufeyson was the biological son of Laufey, King of the Frost Giants, who was abandoned and left to die shortly after his birth. Found by Odin, Loki was taken to Asgard and raised by him and Frigga as an Asgardian prince, along with Thor, becoming the Asgardian God of Mischief.
On Jotunheim, Loki met with Laufey, revealing he was the one who let the Frost Giants in to Asgard to disrupt Thor's coronation. This time, Loki offered a new proposition: he'd open another secret pathway into Asgard for Laufey and his guards to sneak in, kill Odin, and reclaim the Casket of Ancient Winters.
After hearing his true heritage, Loki tried to prove himself to his father by trying to eliminate Asgard's enemies, the Frost Giants. Odin did not approve of this, which caused Loki to let himself fall into the abyss.
Loki Finds Out He's A Frost Giant - Thor (2011) Movie CLIP HD
Did Loki let the Frost Giants in?
Loki had secretly helped the Frost Giants, legendary adversaries of the Asgardians, to infiltrate Asgard just before Thor's coronation. He then manipulated Thor, who refused to be seen as weak, into attacking the Frost Giants at Jotunheim.
Ages ago, Odin fought and defeated Laufey and the Frost Giants of Jotunheim in a great war. Abandoned and left for dead as a baby due to his diminutive size, Odin took Loki, son of Laufey, to Asgard to raise him as his son and a prince in order to one day unite the Frost Giants and the Asgards in peace.
As a result, Heimdall was replaced with Skurge as Gatekeeper as Heimdall fled into the mountains. He continued to watch over Asgard from exile, and observed as Thor defeated Surtur and returned the Crown of Black Fire to Asgard, outing Loki as having disguised himself as Odin in the process.
Loki set up Laufey—his biological father—with an offer to kill Odin, using this as a justification to destroy Jotunheim in the hope of winning Odin's approval for the throne. After Loki betrayed Laufey, Thor stopped Loki's plan to usurp the throne and defeated him during the Duel at the Rainbow Bridge, ending the war.
Loki is confirmed to be worthy of lifting Thor's hammer, Mjolnir, for the first time in official Marvel canon. In The Immortal Thor #5, Loki confidently catches and wields the hammer, showcasing his growth and heroism.
Genius-Level Intellect: Frigga was a very intelligent Asgardian, especially in the ways of Magic. She had proudly taught Loki everything he knew about magic and illusions. This knowledge helped Loki become the God of Mischief.
Loki was born a Frost Giant and abandoned as an infant by his father Laufey, only to be found by Odin during an invasion of the realm of the Frost Giants in Jotunheim. Odin used magic to change Loki to look like an Asgardian and raised him as a son alongside Odin's biological son, Thor.
Loki's magic in the MCU is innate, he doesn't need to study or use incantations to tap into his powers. As a Frost Giant, he is born with magical abilities and has been trained in Asgardian sorcery. Loki's magic is more about trickery and deception, utilizing illusions, shape-shifting, hypnosis, and telepathy.
In his exile, Odin apparently thought over all the acts he had done and likely felt remorse over them, as he showed no hostility towards Loki and even noted Frigga would be proud of him. He also admitted that he truly loved both of his sons and expressed remorse for failing to stop Ragnarök.
Thor used his hammer to defend the other gods from their enemies, the giants. The giants knew that they were no match for Thor and his hammer, so they became very nervous whenever he was near. Together, Thor and his hammer could beat any giant.
Thus, much like with Týr, Odin confronted Mimir, suspecting that he aided the Giants. As punishment, Odin imprisoned him on Midgard's highest peak, bound to a tree made indestructible even to Thor's hammer.
After this inconvenience, Odin adopted the purpose of stealing the giants' secret future knowledge, but he was forced to escape Jotunheim once the giants discovered him. As a result, he furiously ordered Thor to slaughter each giant in Midgard.
Odin allows it. But with Heimdall dead, Atreus decides he should return to Asgard. Odin will soon figure out that Kratos killed Heimdall, and that will surely lead to war. In the brief period of time before that happens, Atreus wants to head to Asgard to help Odin complete the mask.
In Avengers: Infinity War, Heimdall chose to send Hulk to Earth over Loki or Thor, saving him from the Mad Titan Thanos. Loki's history of betrayal and selfishness made Heimdall deem him unworthy of being saved in the dire situation.
Loki's lies came to light in Thor: Ragnarok, as did Odin's whereabouts, with his sons reuniting with him before he passed away and Hela was free. In order to get rid of his father, Loki posed as a guard and later took the throne, casting a spell on Odin and exiling him to Earth.
Most Marvel fans think that Odin favors Thor over Loki because the former is his natural son, while Loki is the adopted son of the giant Laufey. However, there is another, much deeper reason for Odin's favoritism, and it hides in the one-eyed god's past and his relationship with his brother Cul, the God of Fear.
Now Odin did tell Thor he was stronger then him (Odin) which some interpret as Odin meaning Thor is stronger than Odin cause Thor now has his fathers power plus his own. But we have to remember two things. Odin himself said Mjølnir only channeled Thor's power, Thor just needed to learn to use it naturally.
So while Zeus' best feat is defeating a mountain-sized monster, Odin's best feat is defeating a monster as big as nine worlds. Odin outclasses Zeus in intelligence, versatility, strength, and weapons. Zeus simply can't compete. The winner is Odin, All-Father of the Æsir.
