Potato Kugel With Fried Shallots

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1 cup vegetable oil

4 large shallots, thinly sliced

5 pounds Idaho potatoes, peeled and coarsely shredded

1 large yellow onion, coarsely grated

1/3 cup potato starch

1 tablespoon kosher salt

1/2 teaspoon freshly ground black pepper

Pinch of freshly grated nutmeg

5 large eggs, beaten

2 large egg yolks, beaten

1/2 cup extra-virgin olive oil

1 cup boiling water

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