Some ideas-
1. Challenge for nearly running out of confidence, or being seen by a lot of NPCs without getting a game over.
2. Challenge for only removing your top + bra, and another one for only removing your bottom + panties.
3. Edging at least 3 times before allowing yourself to cum, every time you masturbate.
4. Getting very close to a NPC while naked without being seen. Can also add one extra for masturbating near a NPC without being seen.
5. Masturbating at TOP SPEED one or more times.
Some additional ideas- what if when NPCs see you, they would have a chance to pull out a phone or camera and start trying to find and record you? Being recorded would drastically decrease the confidence gauge and lead to quick game overs, so you would have to be careful about being seen. You could also potentially make the NPCs quit trying to record you by putting your clothes back on and allowing them to see you fully clothed. Alternatively, have NPCs with cameras spawn and try to look for you if you get spotted enough times in one night.
What about being able to find certain items around the map that could be used to cover yourself while still technically being nude? Like finding/buying a can of whipped cream and using that to cover yourself, or putting on some bodypaint to make it harder for NPCs to realise that you're naked, etc.
You could also make it so that certain areas of the map would be highly populated with NPCs that pretty much all stay in that one area, so that it would be nearly impossible to sneak through without being seen. Like, for example, there could be a club that has a ton of NPCs just hanging out outside of it. It could potentially lead to some tense situations where you're being chased by NPCs with cameras, and have to escape through one of these populated areas. You could prepare for these situations by keeping a canister of whipped cream on you so you can cover yourself with it, for example.
Lastly, what if you added the ability to both hide your nudity with your hands, or use your fingers to spread yourself? Covering with your hands would decrease the rate at which confidence decreases, while spreading your pussy would increase the rate at which arousal increases, but also increases the rate at which confidence decreases if you're seen. You could more easily streak through populated areas of the map by covering yourself, and spreading your pussy would give you a new way to potentially increase arousal with higher potential risk.
Some challenges based on these ideas-
1. Get your picture taken/recorded without getting a game over.
2. Manage to spawn camera NPCs
3. Have an NPC that's attempting to record you find you fully clothed
4. Streak in front of a certain number of people while wearing whipped cream, body paint, or whatever other lewd temporary outfits you decide to put in.
5. Streak past a highly populated area of the map.
6. Streak in front of an NPC while covering yourself.
7. Streak in front of an NPC while spreading yourself.
8. Spread yourself to an unaware NPC.