Chefs love its umami flavour. Diners love its exclusive-sounding name. It's expensive yet versatile, labour-intensive but stores well for months.

It's XO sauce, one of Hong Kong's culinary gifts to the world and, right now, the darling of Australian chefs.

Across the country, restaurants are unhitching the Cantonese sauce from its usual sidecars of dumplings, rice and stir-fries, and pairing it with burrata cheese, steak tartare and pizza. Some are even playing with the fundamentals of the recipe itself.

While there's no official XO ingredient list, the widely accepted base is a holy trinity of dried seafood, chilli and aromatics such as shallots. After several hours of careful simmering, they come together to make a deeply savoury condiment that's been around since the 1980s but has become especially popular in Australia over the past five years, giving an instant glow-up to all kinds of dishes.

Pipis with XO sauce – one of the best-known XO dishes thanks to Sydney's Cantonese institution Golden Century – is a crowd favourite at Karkalla in Byron Bay where it gets a very Australian twist.

Chef and owner Mindy Woods, a Bundjalung woman, wanted the dish to celebrate the native Australian tradition of gathering pipis, so she added some of the dried bivalves to her XO sauce, replacing the traditional dried scallop.

Meanwhile, the chorizo XO at Pt Leo Estate in Victoria's Mornington Peninsula is a smokier, porkier variation that the restaurant's Spanish culinary director Josep Espuga created for an entree of burrata, XO and pickled radicchio.

Espuga needed a bridge between the Italian and Hong Kong parts of the dish, so he swapped China's Jinhua ham often used in XO recipes for San Daniele prosciutto. Fried chorizo, made to his wife's family recipe, provides the base oil.

The chef says XO's versatility is a big part of its allure.

"It has a skeleton you have to follow – some ingredients have to be there, but you can make it your own."

Meat-free versions are becoming more common too, including at Melbourne CBD restaurant La Madonna and sister venue Rina's in Armadale. Dried shiitake, shimeji and swiss brown mushrooms are the backbone of a vegan XO. "It doesn't contain any seafood whatsoever but it has spicy and big umami flavours upfront," says La Madonna chef Adrian Li.

Sherry vinegar, cured meat scraps and bottarga (salted and dried mullet roe) give an Italian accent to another XO that Li and fellow chef Danny Natoli make. It adds extra dimension to mussel-topped flatbread and spaghetti vongole.

"There's nothing else you can do with charcuterie scraps," says Li, who is happy to find a use for them.

At Collingwood's Mono XO, waste warrior Sam Stafford uses scallop, abalone and prawn offcuts for his XO.

The restaurant's name has nothing to do with the sauce (it's more like "kiss hug") but it's now fitting, given Stafford makes five XO variations to suit gluten-free or vegan diners. They are an easy way for a small kitchen like his to adapt dishes like eggplant skewers or chilled noodles.

Whether it's vegan barley XO or the real deal made with seafood dried over the hibachi grill, Stafford says he aims for the same balance. "Sweetness, savouriness, spice, salt, even a touch of sourness and bitterness."

The popularity of XO has been building for several years, but scan the The Good Food Guide 2022 or restaurants' summer menus and you'll see those two conspicuous letters appear often. With Lunar New Year celebrations beginning on Monday, XO is set to become even more prevalent in Melbourne over the fortnight-long festival.

In a quick-fix world, the slow and careful preparation (sometimes taking a whole day) are part of the sauce's appeal, described by Chinese food authority Tony Tan as "the world's most luxurious dip". The expense of ingredients such as dried scallops, Jinhua ham and, to a lesser extent, dried prawns also helps.

It also has a long shelf-life – an attractive quality in the uncertain world of a pandemic. La Madonna's Adrian Li says he still has some of their traditional, more expensive XO made during Melbourne's lockdown last July.

But among all the XO toasties, gnocchis and burratas, are there also cries of appropriation or bastardisation?

"I'm proud to have the word XO, such a traditional Hong Kong sauce, widely adopted and used in Melbourne," says Adrian Li of La Madonna, whose parents are from Hong Kong. "You could say it to anyone and they will probably know what it is."

"I don't think anyone can claim ownership and say what it is and isn't like champagne," says Stafford, referring to France's strict rules on the naming of wine. He likens XO to ramen, another fairly recent culinary invention. "The whole point of it is that it's so loose."

However, Stafford still has mixed feelings about the sauce being used with pasta. "I'm such a traditionalist, but it's really not my right to have these opinions."

Tony Tan sees variations as just another evolution of the 36-year old sauce. "If somebody really wants to use a particular sauce – be it from France or Australia or whatever – they can always have the freedom to use it, so long as they are not going to say that they created it."

While it's still a baby as far as Chinese culinary traditions go, XO has already made a mark.

Top Lunar New Year specials in Melbourne

Yugen Tea Bar, South Yarra

Referencing the lucky number 8, Yugen is switching from its tea-and-treats menu to an eight-course banquet with a snapper prosperity salad as the highlight to welcome the new year.

$88, Feb 1, 5pm-9pm; yugenteabar.com.au

Chinatown, CBD

Lion dance performances and special banquet menus are happening in the city. Restaurants including West Lake, Shark Fin Inn, Red Emperor and Flower Drum are involved.

Jan 31-Feb 1 from 6pm; visit the Melbourne Chinatown Facebook for more information and updates.

Black Star Pastry, Chadstone

Purse-shaped macarons sporting tiger stripes are a very cute way to ensure 2022 is your most blessed yet. Three flavours – yuzu, kumquat and vanilla –​ are on offer, plus you can add hongbao filled with Black Star money.

From $15 for 3, Jan 28-Feb 6, pre-order required; blackstarpastry.com

Spice Temple, Southbank

It's all about symbolism rather than spice, as the Temple rolls out a special banquet of auspicious items such as tang yuan (sweet rice dumplings), longevity noodles with XO, and dishes in shades of red.

$139 for 10 dishes, Feb 2-13; spicetemple.com.au/melbourne

Providoor dumpling box, home delivery

Lucy Liu's prawn and spinach dumplings plus other pleated creations can be packed and delivered to your door. Lunar New Year banquets are also available from the online platform.

$139 for 2 people, Feb 4-5, pre-order required, providoor.com.au