I either use soft animal fiber, or a really soft synthetic. I despise the scratchy, cheap synthetics. If they're drying out my hands while I'm knitting, there is no way I'm wearing it or putting it on a child. I got my grandma's knitting machine and yarn stash last year, and it had been stored for nearly 15 years after her death. It broke my heart to toss the yarn, but it had grown weak and scratchy.
I like the tassel on this cocoon, but it isn't practical for every day use. I wouldn't leave a baby to sleep in it, especially because of the length of the tassel. The cocoon/sac I'm making is a standard e-wrap stitch on the loom, so it is a tighter knit that fingers won't get all caught up in.
http://www.etsy.com/listing/77603931/sprout-crochet-photography-cocoon-photo?ref=sc_2
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