Melt butter over low heat in a 4-cup sauce pot. Add onions. Cover and cook on low for 15 minutes until onions have softened.

Add figs, 1/4 cup of the water, 1/4 cup of the vinegar, sugar and salt to the pot. Cover and cook on low for another 15 minutes until figs have softened.

Remove the pot from the heat and add black pepper and vanilla extract. Pour into a blender or use an immersion blender to process until smooth. The final texture is up to you — add remaining water and vinegar to blender for a smoother jam or stop now to leave it chunkier.