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Your plain rock cube can become an electric bomb. The upgrade sits behind a secret door shaped like a diamond, set between two staircases. To open it, you have to land the cube in three targets, then defeat the boss that comes out.
Electric Bomb Upgrade in 4 Steps
Step 1: Hit the First Target
Throw your cube at the target shown below.

When the throw lands, a purple flame appears above the diamond shape between the stairs. That diamond is the secret door.
Step 2: Make the Trickiest Shot
Throw the cube at the second target. This is the hardest shot of the three. The order of the targets probably does not matter, but this order is known to work.

Step 3: Sink the Last Shot
This is the final target. Land the cube in it, then go back and look at the diamond between the stairs.

Step 4: Beat the Gargoyle and Upgrade
Once all three targets are hit, the secret door opens and a hidden boss steps out. It is a mechanical gargoyle, larger than the normal ones, and it goes down fairly easily.

After the fight, the gargoyle joins your bestiary. Walk down the stairs behind the door to turn the rock into an electric bomb.
Note: The merchant sells the rock again, and you can carry up to 8 of them. A full stack of eight can stun-lock enemies by knocking them off balance.