Sodium Hydroxide (NaOH) or Lye is essential when making bars of soap, without it there is no soap. Lye is dissolved in a liquid, generally water which is then added to fats and oils to induce saponification. Lye is a hazardous and caustic material, safety glasses and gloves are recommended when handling this material. The amount of lye used in soap varies depending on the different oils and their SAP amounts. There are lye calculators available online to help you determine the correct amount of lye required in your soap batch.
Potassium Hydroxide (KOH) is used for making liquid soap. Sodium Hydroxide and Potassium Hydroxide are not interchangable and both have their own seperate uses.