In a large pot, heat olive oil or butter over medium heat. Add diced onion and sauté for about 5 minutes until translucent. Stir in minced garlic and cook for another 1-2 minutes until golden.

Sprinkle flour over the sautéed onions and garlic, stirring continuously for 1-2 minutes to create a roux.

Gradually pour in vegetable or chicken broth while stirring to prevent lumps. Add diced potatoes, thyme, dill, salt, pepper, and smoked paprika. Bring to a boil.

Reduce heat to low and let simmer uncovered for 20-25 minutes until potatoes are fork-tender, stirring occasionally.

For a creamy texture, blend about half the soup with an immersion blender or in batches with a regular blender until smooth.

Add milk and shredded cheddar cheese to the blended mixture. Stir until cheese melts and the soup is creamy.

Taste and adjust seasoning with salt and pepper. Ladle into bowls and garnish with fresh herbs or cheese if desired.