I just sleep on silk or satin pillowcases. I don't have any breakage from doing this and my hair is not dried out.
Honestly, the idea of wearing a scarf, cap, covering to bed was totally foreign to me until I came to this board. My mother and aunts have very long hair and they've never worn anything to bed. Sometimes we'll tie our hair up if we're doing something messy like painting, but not just to sleep.