After battling with this for several days I finally found a solution. I found an app called Mos (free and open source) which allows you to tweak macOS’s mouse scroll settings per application. Here are the settings that I am using which feel really nice!
It’s a shame that macOS has such crap support for 3rd party mouses. I also tried an app called Smooze Pro which helped with other apps but not Figma. Mos seems to work better in most cases so far.
Check out @tamjeedusman’s answer. There is a preference setting that enables smooth scrolling. This was unchecked for me. Once checked everything is as it should be.
@Mehul_Dangar I don’t agree that this is a solution. It is a temporary solution.
It is affecting everything else like scroll speed on web, text documents etc…