There are many ways to protect a knife blade.  There are sheaths made of many different types of material; some are better than others.  Knife sheaths can be made of wood, plastic, kydex, cloth, or canvas; just to name a few.  If you do seek to get a sheath made of leather, there are a couple of things to keep in mind.

Veg-Tan Leather

Make sure the leather sheath is made from vegetable tanned leather, not chrome tanned.  Tanning is the process of stripping the hair off the hide to prepare it for use.  The chrome tanning process contains chemicals that can harm your blade while stored it in this type of sheath.

Includes a Welt

Ensure the sheath has a welt.  A welt is a piece of leather added between the front and back layer, inside the sheath.  The sharp edge of the blade contacts this instead of the stitching around the edge of the sheath.  The welt prevents your sharp blade from cutting through the stitching.

No Metal Touching Knife

Contains no metal that can harm your knife.  Items such as snaps, rivets, conchos can add a new dimension to a knife sheath, but can also be detrimental to your knife.  If a sheath has these types of items, it can damage a nice handle, or dull a blade.

Retention Device

It has some type of retention device.  Retention devices can be a strap around the handle, or simply a friction fit that holds it in place.

Protective coating

Some leather is dyed, then has a layer of clear coat applied.  In addition, sometimes a waterproofing compound is rubbed into the leather. One will need to determine how the maker prepared the sheath  in order to know how to keep it looking good for many years.

These are just a few things to keep in mind when having a sheath made for that knife of yours.  Once you have the sheath, make sure to keep it conditioned well using some sort of leather conditioner or waterproofing compound to protect it.  Additionally, do NOT store your knife in the sheath for extended periods of time.  Leaving a knife in a sheath long term may pull the oil off the blade, allowing it to rust.

This is a custom sheath for a push dagger. Made of veg tan leather.