Preheat your oven on 175 degrees Celsius or 350 degrees Fahrenheit.
Mix the powdered sugar, water, a pinch of smoked salt and the paprika powder in a bowl.
Once the lumps are dissolved, you can add the peanuts. Toss them around so the nuts are evenly coated.
Divide the peanuts on a parchment paper on a baking sheet. For the baking process, make sure you stay close to the oven. It should take between 10 and 15 minutes.
Let the peanuts cool down, and break them in small pieces. Enjoy!