History
Historically, Cyrillic U evolved as a specifically East Slavic short form of the digraph ⟨оу⟩ used in ancient Slavic texts to represent /u/. The digraph was itself a direct loan from the Greek alphabet, where the combination ⟨ου⟩ (omicron-upsilon) was also used to represent /u/.
Consequently, the form of the letter is derived from Greek upsilon ⟨Υ υ⟩, which was parallelly also taken over into the Cyrillic alphabet in another form, as Izhitsa ⟨Ѵ⟩. (The letter Izhitsa was removed from the Russian alphabet in the orthography reform of 1917/19.)
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