Combine yeast, sugar, and 1/4 cup of the warm water in a small bowl. Stir briefly and let sit for 8-10 minutes until foamy and fragrant. If it does not foam, your yeast is spent -- discard and start again with fresh yeast. This is not an optional step.

In a large mixing bowl, whisk together flour and salt. Pour in the activated yeast mixture, the remaining 3/4 cup warm water, and vanilla extract. Whisk until smooth -- no dry pockets, no lumps. The batter should be thick enough to mound slightly on a spoon but pourable enough to drop easily when tapped.

Cover the bowl tightly with plastic wrap or a damp towel. Leave it in a warm, draft-free spot for 1 full hour. The batter should double in volume and develop visible bubbles on the surface. This fermentation is what makes loukoumades light rather than dense.

Pour oil into a heavy-bottomed pot or Dutch oven to a depth of at least 3 inches. Clip a thermometer to the side. Heat over medium-high to 375F (190C). Maintain this temperature throughout frying -- it will drop when batter enters the oil, so adjust heat between batches.

Dip a tablespoon in cold water before each scoop (re-wet between every scoop). Pick up a rounded tablespoon of batter and use a second spoon or your finger to nudge it gently into the oil. Work in batches of 6-8. Fry 2-3 minutes, turning once, until the loukoumades are a deep, uniform amber.

Remove with a slotted spoon. Drain briefly on a paper towel -- just a few seconds -- then transfer immediately to a serving plate. Do not stack them, do not cover them.

Warm the honey in a small saucepan or in the microwave for 20 seconds. Drizzle it generously over the loukoumades. Finish with a dusting of cinnamon and crushed walnuts if using. Serve immediately -- loukoumades do not hold.