I haven't unlocked all characters, but so far I unlocked my cahracters by brawling and classic mode. I am playing SSE right now so I hope to get more characters by doing that.
Some people are so cheap, they use special brawl with flower stamina. And they set the opponent to 1 HP, when the fight starts, the opponent immediately dies. There are alot more cheap ways people use to get characters by just brawling.