Up until 15 years ago a link between websites was a link was a link etc. and in Google’s eyes if a website linked to another website it was giving a “vote of confidence” to the target website and hence improved its SEO ranking.
Then Google introduced the nofollow link attribute. This is a piece of code inserted into the HTML <a> tag which makes a link work to tell Google that the website is not actual “recommending” the target website when you provide a link to it or someone adding the code linking to you is not recommending you. Therefore it has no direct impact on the SEO performance of the target website.
With the advent of social media all links provide by the various platforms to other websites were set up to automatically be no-follow links, hence they did not impact on SEO performance.
New link types
Google have now announced two new link attributes that provide webmasters with additional ways to identify to Google Search the nature of particular links
rel=”sponsored”: Use the sponsored attribute to identify links on your site that were created as part of advertisements, sponsorships or other compensation agreements.
rel=”ugc”: UGC stands for User Generated Content, and the ugc attribute value is recommended for links within user generated content, such as comments and forum posts.
All the link attributes; sponsored, UGC and nofollow are treated as hints about which links to consider or exclude within Search. Google will use these hints, along with other signals, as a way to better understand how to appropriately analyse and use links within their systems.
The two new links attributes are functional as of September 2019. The nofollow will become a hint in March 2020.
A full explanation is given here on the Google Webmaster Blog