The Eddas are replete with stories of matings between Gods or Goddesses with giants and the giants should be considered as an earlier race of Gods which the Aesir and Vanir displaced. Wodan Himself was of giant parentage via His mother Bestla, a frost giantess. Thus we may conclude that Loki had as much Aesir blood flowing through His veins as Wodan, the chief of the Gods Himself. However Loki`s attitude towards the Gods is ambivalent. Early on in the mythology He is portrayed as a positive member of the Aesir, often coming to their aid in times of crisis. It is only with the beginning of Ragnarok and the events that precede it that we see a markedly different side to Loki. Causing the death of Baldur and preventing His early release from Hel and His slandering of the Gods in the Lokasenna He hastens on Ragnarok and shows Himself as an apparent enemy of the Gods.
That is how people superficially see Loki`s role. However like life He is more complex than that and in my opinion He should be viewed as being the Shadow of Wodan. Loki and Wodan are blood brothers and often journeyed together in Midgard. There is some suspicion that He is in fact the God Lodur who along with Wodan and Hoenir gave life to man. Both Wodan and Loki are half giant in extraction but Loki as Wodan`s Shadow has his giant inheritance from His mother`s and not His father`s side. Usually it was the Gods who mated with giantesses and not the other way around. My inkling is that Laufey may have been raped by Farbauti and hence the apparent shame and lack of identification with the father. This may account for why some are tempted to see him more in the light of being a giant than a God. Curiously He is named after His mother, not His father for in the Eddas He is referred to as Loki Laufeyjarson. Perhaps He was anxious to bury his giant heritage, maybe even ashamed of it for the reason stated above?
Scholars point out that there is no evidence for any cults of Loki in the pre-christian past. However this betrays their lack of understanding of His role. If Loki is Wodan`s Shadow then it is unlikely that we would expect to see any such evidence for the common people were highly unlikely to worship such an apparently negative deity. Additionally as Wodan`s Shadow He in effect IS Wodan, His darker and seemingly more destructive side. However it is the Loki side of Wodan`s personality which grants the All Father such naked intelligence, cunning and at times seeming duplicity. Loki is a catalyst, an agent of change and transformation. Whilst He is responsible for hastening on Ragnarok He was not responsible for the loss of the Golden Age. In His seeming `evil` deeds He is in fact providing a solution to the Wolf Age in which we find ourselves in. Through His actions the new Golden Age will arise after Ragnarok. He is the ultimate problem solver but His motives are not always clear.
Loki represents the ultimate Left-Hand Path Germanic God. He stands alone. He is independent. He cares not for worship, adulation or approval. There is no consensus over the etymology of Loki`s name and this does not surprise me for there is no consensus at all about Loki who is the ultimate enigmatic God. My interpretation of His name is one that suggests `light`. I am reminded of Lucifer[an Aryan not a Semitic name] who shares a similar personality and name. It is likely that Loki derives from the PIE word *leuk. George William Cox in his The Mythology of the Aryan Nations volume II states: "The name Loki, like that of the Latin Vulcanus, denotes the light or blaze of fire, and in such phrases as Locke dricker vand, Loki drinks water, described the phenomena of the sun drinking when its light streams in shafts from the cloud rifts to the earth or the waters beneath. The word thus carries us to the old verb liuhan, the Latin lucere, to shine, and to Logi as its earlier form, the modern German lohe, glow; but as the Greek tradition referred the name Oidipous......., to know and to swell, so a supposed connexion with the verb lukan, to shut or lock, substituted the name Loki for Logi, and modified his character accordingly."
The Eddas know of an Utgard-Loki and a Logi, a fire giant. Wagner in his Das Rheingold conflates the two characters of Loki and Logi together in the form of Loge and it would appear that there may be good grounds for doing so. It is interesting to note that the Old Norse equivalent of Saturday is Laugardagr, the Swedish logerdag and the Danish loverdag. Clearly originally before the pernicious influence of christianity Loki had a much more revered role in the Germanic pantheon but like many of the Gods He was demonised and this demonisation continues amongst many modern day `Asatru`. We need to view Him as the Germanic Prometheus who has brought the light of intelligence to man rather than the christian imposed idea of being a `devil`.