He is desperate to end this war while still gaining something from it. What the right thing to do from here for Ukraine, i don't know.
From best to worst for Ukraine:
1) Winning the war, getting back their territories and joining NATO (very unlikely).
2) Agreeing with Russia that Russia keeps Crimea while Ukraine joins NATO (very unlikely).
3) Agreeing with Russia that Russia keeps Crimea while Ukraine stays neutral (unlikely).
4) Winning the war and getting everything except Crimea (unlikely).
5) The war continuing for some time with a kind of stalemate, with Russia fortifying their positions (possible).
6) Sane as (5) but Ukraine having enough of it and giving those territories (unlikely).
7) Losing the war and so having to give up those territories with chances being high for another invasion (Kharkiv/Odessa) in a couple of years (unlikely).
8) Suing for peace after Russia uses tactical nukes (possible).
9) Getting destroyed by Russian nukes (heavy unlikely).
10) Total destruction of the civilization by a tactical nuke exchange that goes strategic (extremely unlikely).
I think that either a stalemate or Russia using tactical nukes are the main possibilities right now. Though of course, someone killing Putin might change the scenario. But I do not see Putin accepting a defeat while still has the nuke card.