What does it do in soap? Sodium citrate or potassium citrate can be purchased and added to your soap. Citrate is also created if you add citric acid or citrus juice to your soap. The form -- sodium citrate or potassium citrate -- depends on whether the lye is NaOH or KOH.
It is the citrate that is helpful in your soap. Citrate reduces the amount of sticky soap scum created when lye soap is used in water by chelating (binding up) the metals that create the scum.
Tests by Kevin Dunn, author of the Scientific Soapmaking book, showed citrate may not be effective against rancidity (also known as DOS, dreaded orange spots), but informal discussion amongst handcrafted soap makers suggest citrate does help to reduce rancidity as well as soap scum. Most soap makers use a much higher dosage to reduce soap scum than Dunn used in his experiments, and this may explain the difference in results.
Citrate and EDTA are both chelators, so if one does not appeal, you might consider using the other. Citrate is probably more "crunchy" than EDTA, so if a "natural" soap is your preference, you should probably use citrate -- or create citrate from citric acid and lye as described above.
How much should I use? Typical dosage for sodium citrate is 13 g to 39 g sodium citrate powder for every 1,000 g oils (1.3% to 3.9% ppo). Use more for hard water, less for soft.
Typical dosage for potassium citrate is 16 g to 48 g potassium citrate powder for every 1,000 g oils (1.6% to 4.8% ppo). Again, use more for hard water, less for soft.
A high dosage of citrate may cause a layer of tiny white citrate crystals to form on the outside of your soap as it ages. These crystals will easily wash off and are harmless, but can be prevented by using a bit less citrate.
How much lye does it neutralize? None! DO NOT add additional lye if you are using citrate. Extra lye is only needed if you are using citric acid or citrus juice.
How should I add it to my soap? Dissolve the citrate in about 2 times its weight of water. Stick blend that mixture into your oils.
Advanced tip -- Sodium citrate can be made at home using citric acid and baking soda. GalaxyMLP presented this method on the Soap Making Forum. Read more... Be sure to read the whole thread to learn about making the sodium citrate with and without heating and about using the oven to gently dry the citrate mixture into a powder.