Place beef cubes, beef broth, water, and bay leaves in a large pot. Bring to a boil, then reduce heat to low and simmer partially covered for 45 minutes until the meat is tender enough to cut with a spoon. Skim off any foam that rises during the first 10 minutes.

While the beef simmers, heat 2 tablespoons of oil in a large skillet over medium heat. Add onion and cook for 5 minutes until softened and starting to turn golden. Add grated beets and carrots, then cook for 8-10 minutes, stirring occasionally, until the vegetables soften and the beets stain everything deep red.

Stir tomato paste into the beet mixture and cook for 2 minutes to caramelize slightly. Add vinegar and sugar, stir to combine, then remove from heat. This mixture is called zazharka and gives borscht its signature sweet-tangy depth.

Add the sautéed vegetable mixture to the simmering broth along with the cubed potato. Simmer for 15 minutes until the potato is nearly tender when pierced with a knife.

Stir in shredded cabbage and simmer for 10 more minutes until the cabbage is tender but still has a little bite. Taste and season generously with salt and black pepper - borscht needs more salt than you might expect. Remove bay leaves.

Ladle into deep bowls and top each with a generous dollop of sour cream and a sprinkle of fresh dill. The sour cream will swirl into the soup creating beautiful pink ribbons. Serve with crusty bread for dipping.