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Drain the soaked cashews and add them to a blender with the water, nutritional yeast, lemon juice, garlic powder, onion powder, and salt. Blend on high until completely smooth and no grit remains, about 2 minutes, scraping down the sides once. Set aside.
Heat 1 tbsp of the olive oil in a 12-inch skillet over medium heat. Add the onion and bell pepper and cook, stirring occasionally, until softened and the onion is translucent with golden edges, about 10–12 minutes. Transfer to a plate and set aside.
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