Wash and soak urad dal in 2 cups of water for 1 hour.
Drain out water and make a paste in a mixer.
Sprinkle 1 - 2 tbsp water while making the vada batter.
Vada batter should be thick in consistency.
Heat oil in a kadai. Reduce heat to medium and drop tsps ( use small spoons which are shaped like ice cream scoop to get even round shape ) of the vada batter ( 6 - 7 vadas at a time ) and fry till golden colour on both the sides.
Drain and place on kitchen towel to absorb excess oil. Keep aside.
In an iron kadai, dry roast above ingredients on low to medium heat and make a smooth paste in a mixer.
Add 1 tbsp water while making the paste.
In a wide pan / bowl, boil potato cubes and onion slices with salt in 300 ml water (approximate cooking time 15 minutes). When it is almost done, add coconut paste and boil on low heat for 5 minutes.
Add extra 1/4 cup (50 ml) water if required.
Add deep fried vadas and boil for 5- 7 minutes on low to medium heat. Switch off the heat.
Add 100 ml thick coconut milk and mix well gently. Another option is instead of adding thick coconut milk, add 50 ml (3 tbsps) fresh cream. Then the gravy will be thick and light yellow in colour.
Heat oil in a pan and add mustard seeds.
When they crackle, add sliced shallots, red chillies and curry leaves.
Stir fry on medium heat till crisp and golden colour. Pour the seasoning over vada curry and serve with rice.