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Does creating nofollow profile backlinks works and improve the domain authority or should I create only dofollow backlinks.
Well, yes and no.
Directly - no, backlinks won't improve your DA.
Indirectly - yes, if you get a nofollow backlink from some relevant websites, which won't just sit there, but people will actually click, this will bring you some traffic, and good traffic is always good for SEO.
So, just a nofollow backlink from a random, non-related directory won't help your website, but a nofollow link that people would click on is always good.
To answer this, let's unpack what 'works' means.
Domain authority is a made up metric by Moz that was copied by SemRush and Ahrefs, it's an approximation off the authority of a website. Google does not care about these metrics, and does not factor them into your rank. The metric attempts to approximate the relative weight Google gives a website. Google has their own complex algorithm for this, so I always caution folks to not worry so much about the DA metric in an SEO tool and focus more on how their site actually performs in search results.
The concept is simple: the more websites that link to you, the more important you probably are. If important websites link to you, then you must be really important. For a concrete example, a link from Tech Crunch is way more valuable than a link from someone's personal blog.
You're asking if profile backlinks help - even if Google paid attention to nofollow links (they say they don't, but there is some evidence they may factor them in, though it's inconclusive) these profile links are meaningless.
Instead of looking for quick fixes, I'd recommend focusing on creating high value, original content and building relationships within your niche to earn links. That's the best way to be linked from valuable websites, which in turn will help improve your rank.