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I can share in the frustration of having the handle shrink, we've all encountered this. Wood is prone to some movement and the stabilized ones are more resilient to this over untreated woods. On a knife that sees wide swings in weather and humidity, it is hard to beat the characteristics of the phenolic resin type composites like G-10 or similar. This would be my suggestion to source that handle material for a knife that has this type of exposure.
One of the nicer natural handles that isn't prone to shrinkage is mother of pearl. Generally not one for hard working knives though.
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Mike 
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