Asaf Avidan really did lose a horse, which led to the tsunami of emotions he put into this song. It sounds like a lucid dream, but according to Avidan, a pack of wolves chased his horse off a cliff. He spent four days looking for the body, but never found it.
"Suddenly I gave that up," he explained on the Songfacts Podcast
. "I sat down and wrote the words 'lost horse' on a piece of paper, and just bawled. It was obvious that I wasn't weeping just over my horse, but rather about the idea of loss, how entropy always wins - the second law of thermodynamics. So every version of myself that I dreamed to have was lost, every relationship and every friend. I began writing the song in that mood and I wrote about this love that I just lost, this relationship.
The title is very specific about my lost horse and the verses are very specific about a relationship that I had, but the chorus needed to be something more than that, so 'what we are is sundials for the gods,' meaning we are these decaying bodily things for the gods to have some point of reference for how time passes, because the gods don't age or die. So we live this trench of a life as just examples of entropy like everything else in the universe."