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To create distinct hovering effects for each word using the VSCode extension API, you can follow the steps below:

1. Register a hover provider using the vscode.languages.registerHoverProvider method. This method takes two arguments: the language identifier for which you want to provide hover support, and an object that implements the vscode.HoverProvider interface.

2. Implement the provideHover method in the HoverProvider object. This method takes two arguments: the text document and position where the hover was triggered.

3. Inside the provideHover method, you can use the vscode.window.activeTextEditor property to get the active editor instance and the vscode.Range class to get the range of the word at the hover position.

4. Once you have the range of the word, you can then use the vscode.TextEdit class to create a new text edit object with a unique hover effect for that word.

5. Finally, you can return a vscode.Hover object with the text edit as its contents.

Repeat these steps for each word you want to provide a distinct hover effect for.