Start by blooming your yeast. In a small bowl, mix the active dry yeast with warm water (35°C) and 1 tablespoon of sugar. Let it rest in a warm spot for 10 minutes until it becomes foamy.
While waiting for the yeast, prepare your wet ingredients. In a large bowl, whisk together the melted butter, room temperature milk, egg, remaining sugar, and salt until well combined.
Once your yeast is foamy, add it to your wet ingredients and stir gently. Now start adding your flour and potato flakes gradually. If you're using a stand mixer, use the dough hook and knead for 10 minutes on medium speed. If kneading by hand, turn the dough onto a floured surface and knead for 15 minutes until smooth and elastic.
Place your kneaded dough in a greased bowl and cover with a damp cloth. Let it rise in a warm place for 1 hour or until doubled in size.
While the dough is rising, make your cheese coating. Mix together the grated cheddar cheese, powdered milk, flour, and powdered sugar in a large bowl. Add the room temperature butter cubes and mix until you get a crumbly mixture. Break up any large clumps with your fingers.
After the dough has doubled, gently punch it down and divide it into 30 equal pieces (about 45g each if you're using a scale). Roll each piece into a ball.
Take each ball and roll it generously in the cheese coating mixture, pressing gently so the coating sticks well. Place each coated ball on a baking sheet lined with parchment paper, leaving space between each piece.
Let the coated bread pieces rise again for 30 minutes in a warm place. Don't let them rise too long or they'll lose their shape.
While they're doing their second rise, preheat your oven to 150°C.
Bake the bread for 15-17 minutes until they're lightly golden. Don't overbake - they should still be soft and fluffy inside.
Let them cool on a wire rack for 10 minutes before eating. They're best enjoyed warm, when the coating is still slightly crispy and the inside is soft and tender.