In a small bowl, mix together ½ cup granulated sugar and 1 tablespoon cinnamon until well combined. Set this fragrant blend aside for later use.

In a large mixing bowl, cream together 8 tablespoons of softened unsalted butter, ½ cup granulated sugar, and ¾ teaspoon salt using an electric mixer. Once fluffy, add in 1 large egg, ½ cup milk, 3½ teaspoons of instant dry yeast, and 2¼ cups all-purpose flour. Mix until smooth and incorporate half of the ⅔ cup of rainbow sprinkles. Allow the dough to rise in a warm place for 1½ hours.

Roll the risen dough out into a 9x12-inch rectangle on a lightly floured surface. Spread the remaining 8 tablespoons of softened butter evenly over the dough. Sprinkle the cinnamon-sugar mixture and the remaining rainbow sprinkles evenly on top. Carefully roll the dough into a tight cylinder and slice it into 8 equal pieces.

Place the sliced rolls in a buttered cast iron skillet, ensuring each piece is filled with that delightful mixture. Cover with plastic wrap and refrigerate overnight.

The next morning, take the rolls out of the refrigerator and let them rise in a warm spot for 90 minutes. Preheat your oven to 325°F (163°C). Once risen, bake the rolls in the preheated oven for 32-34 minutes.

Allow the Funfetti Cinnamon Rolls to cool in the skillet for about 15 minutes. In a separate bowl, whisk together 1 cup of confectioner's sugar, 3 tablespoons of milk, and ½ teaspoon of vanilla extract to create a smooth glaze. Drizzle the glaze over the warm rolls and top with any leftover sprinkles before serving.