This is the most straight forward and automatic way to progress a hero. Heroes gain levels through standard Milestone based progression. This is ultimately determined by the DM, and when they feel the party has accomplished enough to level up.
Milestone leveling AND XP? Absolutely. XP is gained for defeating villains, completing challenges, surviving encounters, progressing plot. All the things that would normally grant XP as expected. However, this XP does not contribute to leveling as normal. Instead, it allows indvidual heroes to put XP toward various upgrades and goals. Teams can also pool XP to unlock team buffs and boons! This could be anything from getting a +1 in Sleight of Hand for Star-Lord, or an extra spell slot for Doctor Strange. It could be unlocking the Aggressor tactical advantage for Hawkeye, or Scarlet Witch stealing a spell out of the Darkhold. It could even be The Defenders learning the ways of The Hand and gaining a team boon where once per Long Rest, every hero on the team is allowed to jump back to 1HP every time they drop to zero. Teams can use XP to pursue different types of research and even recruit heroes to help them on mission!
The use of XP are multitude and will depend on how the party shapes the world around them, both during the campaign, and in the Commander overlay.