Affiliate cloaking and sponsored tags

[cordoba]

I received an e-mail from one of my VR porn sponsors today, requesting that I add rel="sponsored" tags to all my affiliate links. This was due to Google updating their spam policy yesterday regarding third party content : https://developers.google.com/search...putation-abuse

I had previously cloaked all my affiliate links, primarily for analytical purposes, as well as the assumption that visitors are more likely to click on a cloaked link than an affiliate url, and less likely to just type in the affiliate domain rather than click.

Then I was hammered by the recent Google Core updates, especially the HCU, and I noticed that one of my rivals has gone from strength to strength with every new Google update. I've been trying to figure out what he is doing that Google likes, as his content does not appear superior to mine. The most obvious thing is that he does not cloak his affiliate links. However, he doesn't add the sponsored tag either (or 'nofollow').

So what do you guys think? Is it best to NOT cloak affiliate links, AND to add the rel sponsored tag to them?