nofollow, sponsored and ugc

rel="nofollow" was proposed in 2005 against comment spam, and Google originally ignored such links. On 10 September 2019 Google added sponsored and ugc and made all three "hints about which links to consider or exclude", for ranking at once and for crawling and indexing from 1 March 2020.

Link qualification attributes
Value Use it for Google's treatment
sponsored Ads and paid placements Hint; preferred for paid links
ugc Comments and forum posts Hint
nofollow Links you don't vouch for Hint; also accepted for paid links
Qualifying outbound links (values combine)HTMLLive
<a href="https://shop.example/" rel="sponsored">Partner offer</a>
<a href="https://visitor.example/" rel="ugc nofollow">Commenter's site</a>

Use nofollow "only when you don't trust the source, and not for every external link"; nofollowing everything to hoard PageRank goes against that advice. Qualified targets may still be crawled via sitemaps or other links, so use noindex to keep a page out of the index.