Find and break a unicorn.

The Unicorn can be found north of Diez Coronas and west of Torquemada, if you look on the map there are 3 horses painted there. If it does not appear, fast travel to Cochinay and fast travel back to Torquemada so it will spawn. Some players have reported it to only appear after completing all challenges, though this is yet unconfirmed.

The Unicorn is a Hungarian Half-Bred with rainbows and butterflies, and obviously a horn on its forehead.