Semi-transparent embedded watermarks

A watermark image may be generated that includes a first set of encoded pixels each of which is assigned a first transparency value and a second set of encoded pixels each of which is assigned a second transparency value, the second transparency level being different from the first transparency level. The encoded pixels may be distributed among a set of blank pixels such that each encoded pixel neighbors one or more blank pixels in the watermark image, and in particular at least two blank pixels in the watermark image. Herein, each blank pixel may be assigned the second transparency value. The watermark image may be overlaid and blended over a background source image to create an encoded source image. A decoder system may recover encoded information from the encoded source image.