The Chains of Hephaestus were forged by Hephaestus. They are the only things that can bind a god or immortal. Xena used the chains to bind Ares from making any trouble on Mount Olympus. The chains location remained at Mount Olympus, unless when Ares got his godhood back in You Are There, he cleaned the main hall and put it somewhere else.
It appears, based on evidence within the show, that the chains can bind Both Gods&Mortals Alike as when Hephaestus told Athena just get Xena get into my chains then we will see how longer she lives , the seconed time when xena bound Celesta with it keeping her from touching her Candle and suppressing her powers, the third and Final time when Xena bound Ares with it on Olympus however there is a loophole/limitation to get out of the chains itself it has to be intended for a Mortal or a God but when a God is bound by it and gave up his/her Immortality for another and rendered Mortal he/she can easily unbind themselves as evidenced by Ares when he had no trouble slipping out of them after giving up his godhood to save Gabrielle and Eve.
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