Why bother dividing by 20? Any number divided by 20 is a non-significant number. Why not simply say "no XP for killing things". Much simpler, pretty much the exact same result.
Like I said in my response to
@FrozenNorth, it was basically a number pulled out of a hat. I picked something big because I wanted it to be clearly lower. The double and halving approach is probably more reasonable.
Especially if this leads you to take the logical next step: ditching XP entirely, and just have heroes level up when the adventure predicates it, which is what every XP system ends up with eventually anyway!
Note that I’m making this suggestion this in the context of old-school sandbox play. How you get your XP is what defines the default action. If it’s treasure combat, and combat is a comparatively poor and dangerous way to get XP, then PCs will take steps to avoid combat while getting as much treasure as possible.
I also want to note that PCs aren’t presumably heroes in old-school sandbox play. The
Principia Apocrypha (as mentioned by
@Aldarc) touches on this.
A Quick Primer to Old School Gaming is another good document. If PCs want to become heroes, they have to do things to earn it. The GM isn’t necessarily going to put those there since the GM’s role is to be a neutral arbiter.
While it gets into a bit of a rut, the thread here
on the point of GM notes has several good descriptions of how people go about running their sandboxes and what that means for them. If you want to see a comparison of the old-school sandbox to anthocentric play, I posted a
comparison of my OSE game to our Scum & Villainy game on page 13. Anthrocentric play is not what people mean when they talk about story-driven play in D&D, but it’s close enough for this comparison.
Getting back to the original topic of XP, having XP as a reward is meant to reinforce the intended gameplay loop. In sandbox play, it’s that the PCs have agency, and the rewards reinforce the default actions of the sandbox. In old-school play, that’s retrieving treasure (by going out and finding it). If you wanted to run a different kind of sandbox (e.g., about life in a royal court), then the reward mechanics would be based on that. PbtA and FitD games are good examples of this (though I would not put them in the sandbox category).
Additionally, milestone XP are a violation of my
principles (as enumerated in
@the-Magic-Sword’s thread on his PF2 West Marches game). They need revision (thanks to the GM notes thread), but that wouldn’t change things as far as adventures go. Anyway, the story is emergent in old-school sandbox play. For me to decide something is a milestone, I have to know where things are going, and I don’t. The players have the agency to walk away from “the adventure” or go in a completely different direction. In essence, I
don’t prep plots.