01 - Preheat oven to 350°F. Grease and line two 8-inch round cake pans with parchment paper.
02 - Whisk together gluten-free flour blend, baking powder, baking soda, and salt in a medium bowl. Set aside.
03 - Beat sugar, butter, and oil together in a large bowl until light and fluffy, about 2–3 minutes.
04 - Add eggs one at a time, beating well after each addition. Mix in vanilla extract.
05 - Alternately add flour mixture and milk to wet ingredients, beginning and ending with flour. Mix until just combined—do not overmix.
06 - Gently fold in ½ cup rainbow sprinkles with a spatula.
07 - Divide batter evenly between prepared pans. Smooth tops. Bake for 28–32 minutes until a toothpick inserted in center comes out clean.
08 - Let cakes cool in pans for 10 minutes, then turn out onto wire rack to cool completely.
09 - Beat softened butter until creamy. Gradually add powdered sugar, beating until smooth. Mix in vanilla, salt, and 2 tbsp milk. Add more milk if needed for spreading consistency.
10 - Place one cake layer on serving plate. Spread generous layer of frosting on top. Place second layer on top and frost top and sides of cake.
11 - Decorate with extra sprinkles as desired. Slice and serve.