Preheat your oven to 425°F (220°C).
In a large Dutch oven, melt the butter over medium-high heat. Add the chopped onion and cook until softened and lightly browned, about 4 minutes. Stir in the minced garlic, salt, and black pepper; cook for an additional 30 seconds.
Add the sliced potatoes, chicken broth, heavy cream, and bay leaves to the pot. Bring the mixture to a simmer, then reduce the heat to medium-low, cover, and cook until the potatoes are almost tender, approximately 10 minutes. Remove and discard the bay leaves.
Stir in the cheddar cheese powder until fully incorporated.
Transfer the potato mixture to an 8-inch square baking dish or a 1½-quart gratin dish, pressing it into an even layer. Sprinkle the shredded cheddar cheese evenly over the top.
Bake in the preheated oven until the cream is bubbling around the edges and the top is golden brown, about 15 minutes. Allow the dish to cool for 10 minutes before serving.