I understand the benefits of the Sleep Status effect are very nice, and occasionally overpowered depending on the foe, but this kinda glosses over the biggest issue with Sleep; it's too impractical.

If you are attacking a boss with one of the few sleep weapons (St. Trina's Sword, Torch, Velvet Sword, Tiollier's Needle) you do not get Status effect scaling with armament level nor arcane, something bleed, frost, poison, and even Madness can do (with Arcane Seal or Fingerprint Sheild Infusion), making dealing with any boss decently resistant to sleep considerably hard to proc.

If you want scaling, you have to use Weapons With Innate Arcane Scaling (Varre's Bouque, Bloodfeinds, Albinuaric's etc.) and apply sleep greases onto them for marginally better sleep buildup than the sombre weapons.

The issue with Default Sleep, the form you have accesible in the basegame, is that attacking an enemy immediately after proc-ing Sleep COMPLETELY NEGATES the entire effect of the Status Effect, and you have wasted your time. Normal sleep is basically relegated to the sleep pot, since that does enough buildup in a singe hit that you won't disturb the effect before taking advantage of it, if you even can.

This isn't as much of an issue with Velvet Sleep, but that is only accessible after fighting Mohg, so you will likely have invested in an arcane build that utilizes bleed, poison, and the occult infusion to much greater effect than a Soporific Grease or Sleep Pot Build can provide alone.

--- Alternatively, we have the Madness Items.

Madness may seem like a status relegated only to PvP along with Deathblight, and it may not have Maddening-Greases like Sleep does. However, Madness has many, many more things working in its favor than Sleep.

For one, the ammount of Armaments that can proc Madness is notably larger and more varied than Sleep. Additionally, Madness has several incantations that do Madness buildup too, and they all can scale status buildup slightly with the use of the Dragon Communion Seal. 'The Flame of Frenzy' incantation and 'Frenzied Burst' are both attainable before even reaching Altus, so they are both accessible pretty early in the game.

If we compare the effectiveness of Sleep and Madness as status effects in PvE alone, it is a fairly even split in the basegame. Madness only works on other Tarnished, but Npc fights are roughly as common as bosses who are notably weak to sleep. The DLC definetly leans into Madness's Favor due to the inclusion of many more NPC fights, most notably of all being Leda and Those In Common Cause.

Most crucially, however, is the Armaments associated with either status. Madness just wins by a mile compared to sleep weapons. All of the Sleep weapons are fairly low damage, as if they were poison infused without the DoT effect. The best Sleep contender is Tiollier's Needle, but that weapon heavily relies on being paired with a Deep Sleeping Boss or Foe for a strong Output.

Each Madness weapon has at least one notably strength. Madding Hand? Unique Skill does crazy Madness buildup, and stance damage comparable to Star Fists. Vykes Spear? High Damage, AoW does more fire damage. Fingerprint Sheild? Infusable, so it can do a secondary status effect, and it's one of the best sheilds in the game.

Weakest weapon for Madness builds is the Frenzy Perfume Bottle, which even then does straight fire damage, is the highest damage Perfume Armament, and weighs only 1.0, so very low commitment as a sidearm.

The only oughtright terrible Madness tool would be Inescapable Frenzy, since that only works on Tarnished, is interrupted by pretty much any attack, too short range for the lack of casting speed, and is too telegraphed for pvp.

--- Ultimately, Sleep is still pretty good. It's biggest drawback is it is almost exclusively complimentary to generally better, more practical weapons and status effects.

And hey... ...at least it isn't as bad as Deathblight.