In a medium pot, heat the vegetable oil over medium-high heat until the temperature reads 325 degrees on a candy thermometer.
In a small bowl, beat the eggs with 1 tablespoon of water. In a large bowl, combine the coconut, panko bread crumbs, paprika, garlic powder, salt, and pepper.
Coat each shrimp with the egg mixture then dredge the shrimp in the coconut mixture.
Cook the shrimp in batches for 2-3 minutes ubtil lightly browned.
Place the shrimp on a plate lined with paper towels.
Add all ingredients to the bowl of a food processor and process until combined.