Very finely chop the onion and set aside.
Add peanuts (1/4 Cup) to a food processor and process until fine dust. Set aside once done.
In a pan, heat vegetable oil (1 Tbsp) and fry red curry paste (1 Tbsp), the chopped onion, and chili powder (1/2 Tsp) over medium heat until fragrant.
Add processed peanuts, palm sugar or dark brown sugar (2 1/2 Tbsp), tamarind concentrate (1 Tbsp /w 1 Tbsp Water), and salt. Stir together well.
Add coconut milk (1 1/2 Cup) and reduce heat to low. Keep at a simmer while stirring. The sauce will start to thicken over time, it is recommended that you stir constantly until the wanted consistency is reached. You can then lower the heat as much as possible and wait for the oil from the coconut milk to rise out of the sauce or serve as is.