Took me a little bit to understand it but in summary the mechanic is that failing rolls reduces your points eventually forcing you to need to feed.

I don’t really get the point of euphoria vs thirst though. Say I begin on 5 which seems to be the best starting option, I’ve got a 2:1 chance of failing my roll so very likely I will drop to 4. Now I have a 1:1 chance of failure so I might stay at the 4 or 3 level for longer. As soon as I’m down to 2 the odds of failure increase again, so I would need to feed.

Your rules don’t specify how to calculate the points to recover when feeding, I would definitely add that.

I’d also consider changing the dice mechanic to a linear progression, potentially - unless there’s some additional mechanic to it that I’ve missed.

The way they do it in Cosmic Dark feels like it would fit well here. They roll a d6 to get a result, but in times of stress or if they feel it’s appropriate they can roll a “change” die. That starts on 1 and if you roll higher it goes up by one. So it gets progressively less likely to hit, but you’re out of the game when you reach 6.