Feeling he had done his duty by avenging his father’s and brothers’ death, Sigmund now returned home, where in his old age he was slain in battle shortly after his marriage to a young wife.  Finding him dying on the battle-field, this wife bore off the fragments of his magic sword as sole inheritance for his child, whom she hoped would prove a boy who could avenge him.  One version of the story relates that to escape the pursuit of Sigmund’s foes this expectant mother plunged into the woods and sought help and refuge in the smithy of Mimer, a magician as well as a blacksmith.  Here she gave birth to Sigurd, who, as she died when he was born, was brought up by Mimer, who marvelled to find the boy absolutely fearless.

Another version claims that, discovered by a Viking, mourning over her dead spouse, the widow was carried off by him, and consented to become his wife on condition he would prove a good foster-father to Sigmund’s child.  In this home Sigurd was educated by the wisest of men, Regin, who taught him all a hero need know, and directed him how to select his wonderful steed Grane or Greyfell (a descendant of Odin’s Sleipnir), from a neighboring stud.

Seeing the youth ready for adventure, Regin now told him how the gods Odin, Hoenir, and Loki, wandering upon earth in the guise of men, once slew an otter, which they carried to a neighboring hut, asking to have its meat served for their dinner.  Their host, however, exclaiming they had killed his eldest son who often assumed the form of an otter, seized and bound them fast, vowing they should not be free until they gave as ransom gold enough to cover the huge otter-skin.

The gods, knowing none but a magic treasure would suffice for that, bargained for the release of Loki, who departed in quest of the dwarf Andvari, the collector of an immense hoard of gold by magic means.  As the wily Andvari could not easily be found, it required all the astuteness of the god of evil to discover him in the guise of a fish at the source of the Rhine, and to catch him by means of the sea-goddess’ infallible net.

Having the dwarf in his power, Loki wrung from him his huge treasure, his Helm of Dread, or cap of invisibility, and even tore from his very finger a magic ring of gold, thus incurring the dwarf’s curse.

    “For men a curse thou bearest:  entangled in my gold,
  Amid my woe abideth another woe untold. 
  Two brethren and a father, eight kings my grief shall slay;
  And the hearts of queens shall be broken, and their eyes shall
       loathe the day. 
  Lo, how the wilderness blossoms!  Lo, how the lonely lands
  Are waving with the harvest that fell from my gathering hands!”

Scorning this prediction, Loki hastened to the rescue of his fellow-gods; but, as the otter-skin stretched further and further, it required not only all the treasure, but even the helmet and the serpent ring of gold, to cover it and thus complete the required ransom.