I've been accumulating ingredients for a little while, in the challenges, and I've tried enough of them to figure out what is fun and what is not. The mansion isn't fun, for me. The lava caves aren't fun for me, either. Kobold Island is a lot of fun. I need to have a higher level character to try out the fourth type of challenge, so I have no opinions on that one yet.
After doing these things is when I finally figured out that the ingredient exchange menu isn't the "2 for 1 of any kind" that I initially thought it might be, after checking in with the challenge vendors. After a little poking around at the challenge vendors, I figured out that I needed to look at a flowchart on the wiki to understand ingredient exchange possibilities in anything resembling a reasonable time frame. I still don't know, after poking around in the wiki, which combination of challenges to use to efficiently acquire various items. Apparently, I'll need to make a separate determination for each item category, to figure out how to balance "fun" and "efficiency" when acquiring items through the Challenges.
More to the point, I'm not thrilled to have this much complexity associated with figuring out how to acquire specific items from the challenges. The ingredient exchange system seems to me to be an over-engineered, unintuitive, needlessly complicated in-game system. Please make it simpler.
One possibility is to allow 2 of any ingredient to be exchanged for any other ingredient for a challenge of the same level (with epics handled differently, of course). Then we can play the challenge(s) we enjoy and pick out our items without referencing a flow chart to figure out how to balance "efficiency" and "fun."
Edit and PS: In case it wasn't clear, I'd like to be able to "redline" (ie: not do) a given challenge if it isn't enjoyable, without ending up dramatically increasing the amount of grind needed to acquire any given item; that's the tradeoff between "fun" and "efficiency" to which I'm referring. Thus, for example, I'd like to be able to pre-select which item I'd like, do (only!) the challenge(s) that are fun to acquire ingredients, do a quick "ingredient exchange" using materials acquired in a challenge of the same level, and then acquire the desired item.
Even without the halving of ingredients that occurs at each step, multi-step ingredient swaps tie players up in activities that many probably don't find enjoyable.