Warm 1 cup of water and 1 cup of whole milk to lukewarm. In a mixing bowl, whisk in ¼ cup of granulated sugar. Sprinkle 2 teaspoons of active dry yeast over the top. Allow to sit for 15 minutes until frothy.

Once bubbly, mix in 1 beaten egg, ½ teaspoon of kosher salt, and 4 tablespoons of softened unsalted butter. Gradually fold in 4 cups of all-purpose flour until dough comes together.

Transfer dough to a floured surface and knead for 2-3 minutes until cohesive. Place in a greased bowl, cover, and let rise for 1.5 to 2 hours until doubled in size.

Punch down the dough and roll to ¼ inch thickness. Cut into squares about 2 inches by 2 inches. Heat oil in a Dutch oven to 370°F.

Carefully drop squares into hot oil in batches, frying for 1-2 minutes on each side until golden brown. Use a slotted spoon to turn.

Remove fried beignets and let drain on paper towels. Dust with powdered sugar while warm.