His mother had him blessed as a baby that nothing in the world, except holly, could harm him. Everyone loved him, except Loki, so Loki killed him with the holly.
That's why he was chained up and had the serpent dripping its venom onto his face.
The God that was killed was Balder, and he was actually not killed by Loki himself, as Loki did not have it in him to take his brothers life. Loki only tricked Herod the blind to fire an arrow made out of Holly. And since Herod the blind was the best marksmann the norse gods had, (whatever he pointed his bow at, got hit straight in the heart.) Herod killed Balder with an arrow made out of holly.