Place it in a small saucepan and heat over low heat. Stir every 30 seconds as it melts. If the butter bubbles or starts to brown, reduce the heat. You want to avoid browned butter for this recipe.
Once the butter is melted, sprinkle in the garlic powder and whisk immediately. Cook gently for about 30 seconds. This warms the garlic powder, making it less sharp while imparting a nice garlic aroma.
Whisk in the paprika, salt, and onion powder (if using). Keep whisking until the mixture is warm and golden-orange, and the seasonings are well combined.
Butter thickens quickly when off the heat. If your sauce is thicker than you want, add water by the teaspoon until it pours easily off a spoon. Aim for a thickness similar to warm honey, which is good for dipping breadsticks without being too heavy.
Remove the pan from the heat and let the sauce rest for two to three minutes before serving. This helps the butter and seasonings mix well and ensures the garlic flavor is even.
Pour the sauce into a small dish for dipping or brush it onto pizza crust, breadsticks, or garlic bread while it's still warm. The sauce will firm up quickly when it cools, so make it just before you plan to serve it.