D&D 5E Using Milestone XP to reward players who bring Treasure back from dungeons/wilderness.

[Yaarel]

I think this is a cool method, but it leans toward the idea where the only way to go forward is combat or dealing with hostile situations, when i wish to encourage more types of play

Quite the opposite!

An "encounter" can be anything that seems to take effort. It can be a social challenge to persuade someone, a nonlethal combat, an attempt to by sneak past heavy security, a puzzle, an effort to create a magic item, ... anything.

Indeed, by eschewing XP lethal combat, and railroad side quest milestone, the players a free to do whatever they want. If what they want to accomplish seems challenging, it is probably an "encounter" of some kind.

And the beauty of it is, the difficulty of a challenge is determined AFTER it is over. If something was supposed to be difficult, but turned out to be trivial, then it is an "easy" encounter (worth only half an encounter). And if something was supposed to be a cakewalk or obvious, but turned out to be a near TPK or take alot of effort to overcome, then it is a "difficult" encounter (worth one-and-half, or two, encounters).

Again, the encounter can be anything: combat, social, exploration, or anything.

 

[fikuvino]

When it comes to D&D and its offshoots, I level up characters when they have done enough stuff to have realistically gained enough experiences to become more skilled at the things they have chosen to do, or have accomplished goals they have set for themselves. Since I run sandbox games, I don't have a predetermined idea of what they will do, where they will go, who (or what) they will interact with, etc. Fighting, exploring, solving mysteries, interacting with PCs, etc. all go towards leveling up. I use slow leveling in general, and it gets slower as they go along. In the campaign I'm running right now, for example, the characters have moved up a level roughly every two months of real time (playing 6 hours a week), if you average it all out.