How to treat this succulent ?

Wow, this looks serious! I would take a cutting and root it in water and see if you can start a new plant, just in case. But do it now before it is 100% damaged.

root"turkey grit in a damp loose draining soil but first clean with some Dawn mixed in a bowl of water. submerge the piece and leave it long enough to kill the mealy bugs, you have a major infestation!! i do this for plants i can't stand to part with. i have taken hours to clean the whole plant. you also have to clean the roots and plant in a fresh, sterile pot in new soil. i like regular potting soil mixed 3 parts to 1 part of turkey grit i get from the feed store. keep the soil slightly moist to encourage rooting. forgot, dip the cut ends in cinnamon first to keep rot from starting. also allow good air circulation to avoid a future infestation from getting ahead of you. because of the many folds on a crested plant mealies can get started in no time, need to pay close attention to them.

I hope it works....looks like a very interesting plant!

Before I read “mealy bugs”, which makes sense, I thought it looked like night spider webs that collapsed every morning. This succulent makes me think of truffles that grow under the soil like potatoes. Nav, do you know anything about your plant? ☺️

It is a crested "Eve's Needle" which can occasionally be found at Home Depot. This plant is severely compromised and is a health menace to any other cacti succulents you have. You cannot reverse the damage already done. I would dump it and buy a new one on eBay.

If it were my plant I'd split it up into different containers. After treating all of the pieces for mealybugs.

Don't over water your new one, and make sure your soil is for cacti with adequate sand/soil mixture. I used to have a large cacti garden and I only watered minimally once a month or more.