rel="nofollow" is a link attribute that tells search engines not to pass link equity (PageRank) to the destination URL. Introduced by Google in 2005 to combat blog-comment spam, it has since been joined by rel="ugc" (user-generated content) and rel="sponsored" (paid links) as more specific variants.
Common nofollow use cases: blog comments and forum posts (where the publisher cannot vouch for the linked content), advertising and affiliate links (where Google requires sponsored disclosure), and outbound links to untrusted sources cited only for context.
In 2019 Google changed nofollow from a directive (Google will not pass equity) to a hint (Google may consider it). This means nofollow links can still pass some equity in Google's modern algorithm, but reliably less than dofollow links.
For SEO, nofollow your backlinks where Google requires (sponsored / affiliate / comment spam zones) but leave it off for genuine editorial citations. For embed badges and backlinks from customer sites, do NOT use nofollow — the backlink is the point. SeoChatAI's badge snippet explicitly uses rel="noopener" only (not nofollow) for this reason.