The Hawkeye is an item that helps Link see things far away. They basically act as binoculars, or a telescope. It can also attach to the Bow and allows Link to shoot far-away enemies. It is sold at the Kakariko Village Malo Mart for 100 Rupees after doing Malo's challenge. The Hawkeye is not required for anything, but it is useful, especially in the Hidden Village and in the Bulblin Camp.
Getting the Hawkeye
Before Link can purchase the Hawkeye at the Malo Mart, he must first complete Malo's Challenge. This challenge requires Link to shoot three targets. Two of them are easy, but the third target is a small pole on Talo's lookout. Link can't even see the pole from where he's standing, so it's more of a guess the first time he shoots. When he hits the pole, Malo tells Link that his skills have improved, then gives him a Piece of Heart. The Hawkeye is now available in Malo Mart.