Challenges are fun trials sprinkled all over the game. You earn many of them simply in the course of trying out all the different modes, but some of them are specific enough to need some foreknowledge. Completing Challenges can unlock Gold, Spirit Points, Mii Fighter Outfits, music tracks, and rare spirit emblems.
Hammer smashes can be used to uncover most challenges, allowing you to skip having to chase after them manually by fulfilling the description condition. To use a hammer, click on it on the bottom-right of the screen, then choose which Challenge icon to reveal! You can only use hammers every so often, so spend them on Challenges that seem hard or tedious. A few Challenges are hammer-resistant; you’ll just have to roll up your smashin’ sleeves and get to work!