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Dragon’s Blood is a resin, which is harvested from a variety of different plant species. The bright red pigment is what lends it the name Dragon’s Blood.
The Dragons Blood Masala Incense has an earthy, dense, aroma with notes of amber, vanilla, and spices that give it a musky, slightly sweet floral undertone. This rare and mesmerizing fragrance offers tons of benefits.
Some practitioners use a powdered version of Dragon’s Blood as incense. If you'd like to try this, it tends to work best if you mix it in with other dried items, and then burn it on a charcoal disc.
5 Ways to Use Dragon's Blood in Magic (thanks to www.learnreligions.com)
How to Burn Resins: If necessary, crush the crystals to get them to manageable size/condition (often a powder). Light the charcoal with matches or lighter for about 20 seconds until it self-ignites. Use tongs to hold it up (never hold it with your fingers alone or you might get burned). Place the lit charcoal in a bowl or any incense burner. The bowl or incense burner should be filled with sand or dirt. Let the charcoal warm for a few minutes. It turns gray around the edges when it is ready. Now you are ready! Add a small amount of resin on top of the charcoal. The resin will burn and soon release essential, aromatic oils through the smoke. Continue to place resins or powder on charcoal as they burn out and smoke decreases for a continuous burn.
Here's a great resource for olfactory sciences, history, etc.