Place the potatoes into a pot of boiling water and cook until they are fork-tender. Drain well and transfer to a large mixing bowl.

Meanwhile, melt the butter in a large skillet, sauté the minced onion over medium heat until translucent and soft, approximately 5–6 minutes. Add this onion and butter mixture to the drained potatoes. Incorporate the grated cheddar cheese and mash until the mixture becomes thick and cohesive. Season to taste with salt and pepper. Set the filling aside to cool completely.

In a separate large bowl, blend the flour with the salt and baking powder. In another bowl, whisk together the egg and olive oil. Pour the egg mixture into the dry ingredients and begin mixing. Gradually add the warm water, one cup at a time, kneading the dough with your hands. The dough will start sticky but should become smooth and elastic after kneading for 2–3 minutes.

Lightly flour a clean surface or silicone mat and divide the dough into two equal portions. Roll out one portion to a ¼-inch thickness using a rolling pin. Using a 3-inch round cutter or a drinking glass, cut circles of dough, setting them aside on a clean dish towel. Re-roll scraps as necessary. Repeat with the second half of dough to yield approximately 24 rounds.

To assemble, stretch each dough circle slightly with your fingers, place a spoonful of the potato-cheese filling in the center, and fold it in half. Press the edges firmly to seal, then add extra filling at the sides if needed and reseal. Use the back of a spoon to crimp the edges securely. Continue with all dough rounds; any leftover filling can be reserved.

Bring a large pot of salted water to a boil. Drop pierogies in batches of six into the water. Cook for about 5 minutes, or until they float to the surface. Remove using a slotted spoon and place on a clean kitchen towel. Cover with another towel to prevent drying.

In a large skillet over medium heat, melt 2 tablespoons of butter. Add the boiled pierogies in batches and pan-fry until golden—approximately 2–3 minutes on one side and 1–2 minutes on the other. Replenish butter and wipe the skillet as needed between batches.

Serve immediately with melted butter, sour cream, and chopped chives if desired.