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, softened butter, and vegetable oil in a large bowl until light and fluffy, approximately 2 to 3 minutes.
04 - Add eggs one at a time, beating thoroughly after each addition. Mix in vanilla extract.
05 - Alternately add flour mixture and milk to wet ingredients, starting and ending with flour. Mix until just combined. Avoid overmixing.
06 - Gently fold in 1/2 cup rainbow sprinkles using a spatula.
07 - Divide batter evenly between prepared pans. Smooth tops with spatula.
08 - Bake for 28 to 32 minutes or until a toothpick inserted in center comes out clean.
09 - Let cakes cool in pans for 10 minutes, then turn out onto wire rack to cool completely.
10 - Beat softened butter until creamy. Gradually add powdered sugar, beating until smooth. Mix in vanilla, salt, and 2 tablespoons milk. Add more milk if needed for spreading consistency.
11 - Place one cake layer on serving plate. Spread generous layer of frosting on top. Position second layer and frost top and sides of cake.
12 - Decorate with extra sprinkles as desired. Slice and serve.