The component parameter called Path Variable can contain the name of a variable you can use anywhere inside the component as the path to that component. The advantage of using the path variable for all paths inside the component is that the component then becomes very portable and can be dropped into any network. Since all internal paths will point to the path variable instead of using absolute paths, moving the component into another network will not break any paths. All components have a Path Variable parameter. If all clones have the same path variable, that one variable will refer to the unique location of each clone, making paths in clones simpler and clones more portable.
Example If you set the Path Variable to EXPLOSION for the component named fireyexplosion, then anywhere inside the component $EXPLOSION can be used to get the network path to the fireyexplosion component. If you move the fireyexplosion component to /mixer/fireyexplosion, then $EXPLOSION = /mixer/fireyexplosion. If you move the fireyexplosion component to /mixer/controlpanel/project/fireyexplosion, then $EXPLOSION = /mixer/controlpanel/project/fireyexplosion.