The challenges in Iberia are meant to make Minecraft harder, but also more fun and realistic, if possible. “Sleep to Heal” is directly related to the naturalGeneration gamerule. This gamerule is the key difference that makes hardcore into ultra hardcore, and it prevents the player from healing just because they’re full. In UHC games, whether multi player or single player, that means you would need golden apples, golden carrots, potions of healing or potions of regeneration to get well after being injured. The fact that all of these options for healing exist make it so that turning on this rule still allows the game to be playable, especially if you’re not playing hardcore. Sleep to heal turns this gamerule on, but also adds one more way to heal: by sleeping.
Specifically, for sleeping to heal you, you need to sleep without being hungry at all. Additionally, you need to wake up naturally (i.e. not because a monster attacks you). When those conditions are met, you will heal one heart. It’s not much, but before you have lots of gold, it’s nice to know you can slowly heal yourself just by making sure you get your rest.
Besides making Minecraft harder, it’s more realistic: rest is important in real life when you’re recovering from an injury or sickness. It doesn’t fundamentally alter the mechanics around health or hunger, or sleeping, so it keeps that wonderful vanilla feel. It adds an element to your gameplay decisions. If you’re hurt, you can stay closer to base, make sure you’re sleeping through the nights. Plus it gives you a reason to sleep. In vanilla, after the first few nights there isn’t much reason to sleep. You can fight off the nasty monsters, or just build within your base, or mine through the night. Now you have to trade off those possibilities with the need for sleep in order to heal up.
Oh, and sleep is also used to set your spawn point, but a different challenge will take that ability away. Stay tuned …