The Challenge Update adds many new features like:

Hardmode:

This new difficulty is for players who have mastered the base game and want a new challenge. The whole game has been completely redone with more challenging, and sometimes completely new setups.

Achievements:

A collection of feats for players to achieve. Some of them unlock just for beating the normal story but some of them have you play the game in a completely different way, like beating the game in under 5 minutes or using advanced movement tech.

All Changes:

• Achievement system
• Hard difficulty
• New menu music
• New graphical elements like background foliage and birds
• New settings like keybindings and option to disable the day and night cycle
• A new "secret" has been added.
• Boosted wall jumps now give you an extra double jump.
  
• The main menu has been reworked.
• New icon for getting a checkpoint has been added. 
• A corner avoidance quality of life feature has been added.