People constantly ask me if they can use things like yoga mats, flannel sheets, or whatever material in the bottom of their dragon's cage. The really simple answer is that I don't know and would encourage you to investigate the safety of it before using anything that hasn't been extensively used as standard in the dragon community, where the safety of it is known. The main point to remember is that when you use something unconventional, it wasn't designed to sit under a 105 degree lamp for 12 hours a day. Its therefore important to always research the long term safety of anything you're using.
*Note that puppy pads are never safe for use with a dragon. They contain a chemical that's released when the pad gets wet that's not safe for dragons. If you're using puppy pads, take them out immediately.
Newspaper is a favorite choice for many owners. It doesn't harbor nearly as much bacteria as reptile carpet does and its extremely easy to maintain. You simply change it out each time and you're done. This makes it a really sanitary option.
I love newspaper, especially with multiple cages, but I didn't like the "busy" look of printed newspaper so I specifically use unprinted newspaper. Butcher paper or rolls of large craft paper work well also. You can find unprinted newspaper on Amazon or Walmart, Office Depot, etc. Its also often sold as packing or shipping paper. Its all essentially the same (with respect to grades of paper and all options would work equally well. It also looks very nice and clean inside of a cage.
Paper towels are a really good choice for babies and young juveniles. The only reason I wouldn't suggest paper towels with bigger or older juveniles or adults is because their nails will get caught in it, and they'll just end up dragging it with them and making it a mess.
There are huge debates about sand. The following is a post I wrote in my facebook ground regarding sand.
USING SAND IN AN ENCLOSURE
Tons and tons of members are screaming at people when they ask about sand, the past few weeks. Knock it off. There's no reason to jump all over someone for using play sand.
If your dragon is impacted from play sand, the sand isn't the issue, your husbandry is.
Play sand is best for experienced owners who know extensive husbandry, including proper diet, vitamin and calcium schedules, and proper temperatures. If you're a new owner should you keep a dragon on sand? No. You don't know husbandry yet and that's not a bad thing. It just means that when you're starting out, you don't know what to specifically do in terms of care, as you're just learning.
Should you use other types of sand? No. The calcium sands the pet store sells are crap. They harden and clump if ingested and the colored sands will literally stain your dragon.
Does that mean I'm pushing sand? No. I'm just getting really tired of seeing people ganging up on members for using play sand. Its just not needed. If that's your opinion to not use sand, that's perfectly fine but you don't need to start bashing on someone who is. Your friend's dragon or whoever's dragon online that you heard stories about from sand didn't get impacted from sand, they got impacted from shitty husbandry. Stop tearing apart people about play sand please. Thanks.
Tile is also an option, provided you have the time to maintain it. I see a lot of people who have this false notion that they can lay tiles down and wipe them up when needed, and then never do anything else to them. Like other substrates, if not properly maintained, this will become a haven for bacteria. If you're using tile, they need to be disinfected regularly with either steam above 165 degrees or ammonia diluted in a ratio of 1:10 with water. Things like vinegar, bleach, etc won't kill certain things like coccidia or fungus.
Wood chips, bark, walnut, etc. are terrible for dragons for several reasons. First of all, they hold in moisture and create an environment that's sustainable for mold. Second, they harbor an absolute ton of bacteria, making them really unsanitary in a captive environment that has minimal ventilation.
Ever see a walnut shell shaving under a microscope? I have. Its jagged. Imagine those particles flying into your dragon's eyes, just as they walk through it.
Various types of loose substrates are horrible for the respiratory system, when breathed in over a long period of time, and contribute to eye infections and eye abrasions. Its best to stay away from them. Also, if ingested, not all substrates can be easily passed through, which creates additional health issues, which are all very serious in nature.