Sponge: In a medium bowl sprinkle the yeast over the warm water; stir to dissolve. Add the flour and mix until smooth. Cover and set aside until it puffs up (20 to 25 minutes).
Dough: Stir down the Sponge. Scrub the potatoes, then grind or grate them with the skins on or process in a food processor into a coarse chop; do not puree. Transfer to a large bowl. Add the ground potatoes and onion to the Sponge and stir until blended. Add the stale roll, flour, salt, baking powder, and ground pepper; mix or pulse only until incorporated. Add the oil and egg and mix well. Drop the mixture out into 3 well-greased 8- or 9-inch loaf pans. Each loaf should weigh about 15 ounces. Leave room for expansion – the potatonik will rise in the oven.
Baking: Bake with steam (see below) in a preheated 360 F oven until the crust is brown and feels firm when gently pressed in the center with your fingertips (about 1 hour). Let cool on a wire rack covered with a cloth for 5 minutes to allow the loaves to steam. Invert and tap out onto the rack. Serve warm. DO AHEAD: Potatonik can be refrigerated for several days or frozen for 1 to 2 weeks. Reheat at 325 F until warm. When reheating, I like to bake it for 35 to 45 minutes to develop a hard crust.
Steam in Baking: Place an empty roasting pan or other heavy pan on the floor of the oven 5 to 10 minutes before baking, so it gets hot. Brush the tops of the loaves with water, place in the oven and carefully toss 6 to 8 ice cubes into the hot pan, or pour in 1 cup boiling water and immediately close the oven door. CAUTION: When using boiling water, wear a glove and keep your face away from the open oven door, since there will be a burst of live steam when the boiling water hits the hot pan. Do not open the door to peek or the steam will escape.