You offer a hot pepper to the king, and he gives you a drop of something. You look down at the drop to see it transforming into a disc. And not just any old disc at that. It's a jade disc.
Have you ever seen ancient Chinese jade discs with holes in the middle? That's what this kanji is referring to.
Wait, did a drop really just change into a disc? What the heck is (へき) going on?