You can add a watermark to images using Cloudinary's transformations. Watermarks are based on uploaded images (JPG, PNG, etc.).
Watermarks can be applied as either an incoming transformation while uploading the image to the cloud or dynamically when delivering images to users.
This blog post describes how to add overlays and watermarks, while another opacity based technique is described in our Image opacity manipulation and dynamic watermark generation post.
The following sample of a transformation URL dynamically added an uploaded image named 'cloudinary_icon' as an overlay for the 'mountain' image. The opacity of the icon was reduced to 30% and brightness was increased to make it white: