In the realm of digital artistry, behold a breathtaking masterpiece that transcends the boundaries of imagination and reality: a three-layered underwater cake, adorned with the most intricate and enchanting details. This captivating creation is set within an artistically designed universe diorama, where every element is brought to life with hyperrealistic precision.

The focal point of this extraordinary diorama is a magnificent black pirate ship, perched majestically at the cake's pinnacle. Its ebony sails billow in a phantom breeze, and its meticulously carved wooden hull boasts a level of craftsmanship that defies belief. The ship's rigging, adorned with tiny, glistening jewels, dances gracefully in the subtle currents of the underwater world.

Descending into the depths of this aquatic wonderland, one's gaze is drawn to the abyssal bottom layer, where an awe-inspiring monstrosity lurks. The monstrous Kraken, a creature of mythical proportions, emerges from the dark abyss, its tentacles reaching menacingly toward the cake's base. Each tentacle is a work of art in itself, with suckers and barnacles painstakingly detailed in photorealistic glory. The Kraken's malevolent eye glows with an eerie, otherworldly light, casting an ominous shadow on the underwater terrain.

Dramatic lighting further accentuates the beauty of this creation. Shafts of ethereal light pierce through the water, creating a play of shadows and highlights that enhance the diorama's depth and dimension. The hyperrealism of this underwater world is nothing short of astonishing, with every texture, reflection, and ripple rendered with pixel-perfect accuracy.

The depth of field in this composition is expertly employed to draw the viewer's eye to different elements within the scene, allowing for a sense of exploration and discovery. As one admires the artistry, it becomes apparent that this masterpiece was created using the Unreal Engine, a testament to the boundless capabilities of digital artistry.

The entire scene is rendered in stunning 8K resolution, bringing forth an unparalleled level of detail and clarity. The result is a visual symphony that seamlessly melds reality and imagination, inviting the viewer to immerse themselves in a world where the extraordinary becomes real.

This artistically transcendent masterpiece, with its black pirate ship atop an intricate underwater cake and the menacing Kraken below, stands as a testament to the limitless possibilities of digital art. It is a breathtaking fusion of hyperrealism, photorealism, and sheer creativity, a testament to the talent and ingenuity of its creator. This diorama, with its dramatic lighting, depth of field, and unrivaled level of detail, serves as a testament to the limitless horizons of artistic expression.