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When ingredients are at room temperature, eggs, butter, and dairy products form an emulsion which traps air. While baking in the oven, the trapped air expands and produces a fluffy baked good.
Room temperature ingredients bond together easily since they are warmer. This creates a seamless and even textured batter. When you have a smooth batter, you have a uniformly textured baked good. Cold ingredients do not incorporate together as easily.