Google introduced nofollow in 2005 to fight comment spam. Since 2019 it, along with rel="sponsored" (for paid links) and rel="ugc" (for user-generated content), is treated as a hint rather than a strict command — Google may still use these links for crawling and ranking in some cases. The opposite of nofollow is an ordinary dofollow link, which does pass equity.
You should apply nofollow (or sponsored) to paid placements and affiliate links to stay within Google's guidelines, and ugc to comments and forum posts. Not marking paid links can be considered a link scheme and put your site at risk.
For SEO strategy, a natural backlink profile contains a healthy mix of followed and nofollowed links — an all-dofollow profile actually looks unnatural. Nofollow links still deliver referral traffic and brand exposure even when they don't pass ranking signals.