A nofollow link is a link that carries the nofollow attribute. This attribute is used to tell search engines that the link is not being endorsed, but rather is just a reference. A nofollow link does not pass PageRank (Popularity), but PageRank is only one of several signals that a link can transfer.
Links can also convey trust and relevance. Most people who work with links therefore try to avoid nofollow links as much as possible, but it is important to remember that a natural link profile also includes links with the nofollow attribute.
Sponsored links or purchased links should generally always carry the rel=”nofollow” attribute; if this is not the case, it is a clear violation of Google’s guidelines.