Challenge is a game mode unlocked at 500 rating.
Challenge is a daily game where you battle against an AI setup. Usually, the player is at a disadvantage in position, pieces, or have lower morale, but all of them are beatable. If you win the battle, the next day when the next challenge is released, you may claim rubies based on difficulty (how many people failed the challenge), which is a percentage with a certain curve (100% is often achieved even with many successes). The reward is 20 rubies max at 95%+ difficulty. Sometimes Challenge has an unusual unit such as Chaosportal, or impossible positions.
Strategy: Check for pieces that the AI is weak to and have a hard time responding to, such as HauntedArmor, SoulKeeper, Behemoth, etc. Try to rush the king in any challenge, due to your disadvantage. Due to the challenge setup being similar to mid to end game, the open areas will be open to forks, pins, and discovery attacks, all of which the AI have trouble against.