Some sheaths also include a pocket on the front for a sharpening stone, folding knife, what have you. The sheath should serve to protect both the knife and you. The sheath must be designed so the knife can be secured and won't slip out accidentally. The most common method is with a restraining strap around the handle, secured with a metal snap or Velcro. Some custom knives come with molded leather sheaths, but even the best of these have been known to loosen up, especially if wet, so this is generally not the best design.
Some knives come in unique sheaths which address the issue of security in innovative ways.
The best of these make it automatic, so you don't have to remember to do it yourself. The bottom line is that you don't want to lose the knife and the sheath must do its part. Many of these sheaths have the advantage of no restraining strap to forget to close, nor any device to be unfastened or unlatched in order to draw the knife. The lightweight molded Kydex plastic holds the knife securely, even upside down, and won't relax its grip over time or when wet. It doesn't retain moisture and the sturdy material will stand up to any abuse you'd likely give it.