Damar (or Dammar) resin is a tree sap collected from trees in Malaysia. Damar resin is harvested without harming the tree. Damar resin is added to beeswax to make encaustic medium. It acts as a hardening agent allowing your painting to cure and will reduce or prevent blooming (a white clouding of the surface). Beeswax will alone will melt at 145 degrees F, adding damar will raise the melting point to between 180-200 F degrees.
On its own, Damar Resin is not toxic. Damar varnish is toxic and should not be used.