Slice cremini mushrooms in half. Keep mushrooms and the following vegetables separate after sliced.
Slice 1 large carrot into pieces that are 1-2 inches thick, then slice each piece in half. Slice 8 oz. peeled pearl onions carefully in half. You don’t want them to fall apart. Chop 1 medium red onion. You don’t have to be too fancy. The Instant Pot is going to pulverize the onion into the sauce. Mince 6 garlic cloves and de-leaf 1 tbsp. of thyme.
Cube 2 pounds lamb shoulder (if it isn’t already) into large, 1-2 inch cubes (if your meat is that thick). You want the cubes to be nice and chunky.
In a large skillet, add 2 tbsp. of butter, melt and coat the pan. Place the sliced mushrooms cut-side-down. Allow them to sear on HIGH heat for 6-8 minutes, without flipping them. Once done, remove into the Instant Pot. They don’t have to be cooked through.
Add 2 more tbsp. butter to the pan. Place sliced pearl onions cut side down, and allow them to sear for 5-7 minutes on HIGH heat. Remove and keep them separate. You won’t be adding them to the pot until the stew is done.
Add the minced garlic and thyme to the pan with 1 tsp. of butter and sauté until lightly brown - about 2-3 minutes. Remove into the Instant Pot when finished.
In a mixing bowl, toss lamb meat chunks with 2 tbsp. of flour, 1 tsp. of salt and 1 tsp. of pepper until each chunk is thoroughly coated.
Add 1 tbsp. of butter to the pan, allow it to coat the bottom, then add the cubed lamb. Brown on HIGH for 5 minutes, then flip and sear on the other side for 5 more minutes. Remove into the Instant Pot when finished.
In a measuring cup (or bowl) mix together 1 cup beef broth with 2 tbsp. tomato paste, 2 tbsp. Worcestershire sauce, 1 tsp. salt, 1 tsp. pepper, ⅛ tsp. smoked paprika, ½ tsp. garlic powder and ⅛ tsp. cayenne pepper.
Add seared mushrooms (and any liquid that may have escaped from them while they sat), sliced carrots and chopped red onion (not the pearl onions) to the pot and give everything a gentle stir.
Add beef broth mixture with 1 cup of dry red wine to the Instant Pot. Place the lid on top and lock it in place.
Ensure that the Instant Pot valve is engaged. Set it to “Pressure Cook” for 20 minutes on “High.”
Once done, carefully release the pressure by disengaging the pressure valve. While it depressurizes, mix 3 tbsp. flour into ¼ cup of beef broth, ensuring all lumps are mixed and smoothed out.
Lift the lid once depressurized and mix in the flour slurry. Then, gently stir in the seared pearl onions and serve.