A challenge is a mission that a player needs to finish within a time limit, only one challenge can be active at the same time.
Those challenges can be picked up from a person in green robe (The Grandmaster) that is in Rats HQ.
The challenges have some maximum ranking of difficulty. That means, a player may not pick certain challenges if his/her reputation is high enough. Same goes in reverse, a player cannot pick higher difficulty challenges if his/her reputation is too low.
Finishing or failing a challenge locks a player for 30 minutes from picking any other challenge again.
The faster you do it, the better the reward. If you are faster than the average time, your reward increases, up to 150%. If you are slower than the average time, your reward decreases, down to 30%. If your time is the same as average, you get 100% reward. If your time is worse than the “worst time”, you get nothing.
Item rewards are always of 100% cool quality. The exception is armor, which is perfect quality. The special weapon rewards are of outstanding quality.
Once you reach a certain reputation with the Grandmaster, you will be able to buy SPECIAL weapons from him. It costs both caps and reputation. This means that you are able to buy a limited amount of the weapons before you need to repeat some challenges.
You may also request a special kind of armor from him. You cannot craft this armor and its variant depends on the current tier.