In a small bowl, sprinkle the powdered gelatin over 1 cup of the cold water. Allow it to sit for about 5 minutes until it blooms and becomes thick.
In a medium saucepan, combine the remaining 1 cup of water and the allulose. Stir gently over medium heat until the allulose dissolves completely. Bring the mixture to a gentle boil, then reduce the heat and let it simmer for about 5 minutes.
Remove the saucepan from heat. Carefully add the bloomed gelatin to the hot syrup, stirring continuously until fully dissolved.
Pour the mixture into a mixing bowl. Using your electric mixer, whip on high speed for about 10 minutes until the mixture becomes thick and fluffy. Add the vanilla extract in the last minute of whipping.
Line your 9x9 inch baking pan with parchment paper. Pour the marshmallow mixture into the pan, smoothing the top with a spatula. Let it sit at room temperature for about 4-6 hours, or until set.
Once set, remove the marshmallow slab from the pan and peel off the parchment paper. Cut into squares and enjoy your homemade sugar free marshmallows!