Line an 8 x 8-inch pan with parchment paper and set aside.
In a small bowl, add half your water and sprinkle the gelatin powder over the top. Let it sit for 10 minutes, for the gelatin to soak up some of the liquid and become slightly gooey.
In a small saucepan, bring the remaining water and sweetener to a simmer on medium heat. Stir regularly, until it begins to boil. Let it boil for several minutes, before removing from the heat.
Add the gelatin mixture into the bowl of a stand mixer. On low speed, turn the mixer on and mix for 30 seconds. Slowly add the boiling water/sweetener mixture, along with the vanilla extract, and beat for 10-12 minutes, or until stiff peaks form.
Transfer the marshmallow mixture into the lined pan and use a rubber spatula to smooth it out as much as possible. Refrigerate it for at least 2 hours, or until set.
Once set, use a slightly wet knife to cut pieces. Dust with keto powdered sugar and enjoy.
If you don't have a stand mixer, a hand mixer can be used.TO STORE: These marshmallows should be stored in the refrigerator in a sealed container, for up to 1 month. TO FREEZE: Place leftovers in a ziplock bag and store them in the freezer for up to 6 months.Recipe loosely adapted from here.