Once you unlock the "Cladding" or "Flooring" for a specific block, use that Cladding to create a patch of that block in dirt. For Flooring each use will yield 25 Blocks of that kind which can be removed from the ground. For Cladding, dig down two blocks and each use will yield 48 Blocks of that kind at max, which can be removed from the ground. Once you've picked up your new blocks you can then create more cladding or flooring with the blocks you created for an exponential increase of the blocks in question.
The following are all rewards obtained by completing each challenge. All of them are recipes that can only be used in Terra Incognita (Unlocked by beating the first chapter for the first time). Access to the Challenge progression is also unlocked for each chapter you have beaten. Which can then be viewed from the main menu screen > Chapter of Choice > View Challenges (Press Square when selecting New/Load Game).