Preheat the oven to 175°C (350°F). Grease and line two 8-inch cake pans. Lightly toast the pecans in a dry pan until fragrant, then set them aside to cool.
In a large bowl, beat the butter and sugar together until the mixture becomes light, fluffy, and pale in color. This step is important for creating a soft and airy cake texture.
Add the eggs one at a time, mixing well after each addition so everything blends smoothly. Stir in the vanilla extract. In a separate bowl, combine the flour, baking powder, baking soda, and salt.
Now start adding the dry mixture into the butter mixture little by little, alternating with buttermilk. Mix gently after each addition just until the batter comes together. Do not overmix. Fold in the toasted chopped pecans.
Pour the batter evenly into the prepared cake pans and bake for 35–40 minutes, or until the cakes turn golden and a toothpick inserted in the center comes out clean. Let the cakes cool completely.
For the caramel frosting, melt the butter in a saucepan over medium heat. Add the brown sugar and milk, then stir continuously and let it boil for 3–5 minutes. Remove from heat and mix in vanilla extract and powdered sugar until the frosting becomes thick but still pourable.
Place one cake layer on a serving plate and pour warm caramel over it. Add the second layer on top, then pour the remaining frosting over the cake. Finish with toasted pecans on top and let it set before slicing and serving.