dragonfly_initializer.rb

# ... other initialization stuff above here ...
 
Dragonfly[:images].processor.register(Watermark)
 
# optional, but gives you the ability to use watermark(opacity: 50)
# rather than process(:watermark, opacity: 50) 
Dragonfly[:images].configure do |c|
  c.job(:watermark) { |*args| process(:watermark, *args) }
end

I couldn't get this to work on Dragonfly 1.0.10 and after some digging I ended up coding the following solution that only requires an initializer file:

# config/initializers/dragonfly.rb
require 'dragonfly'

Dragonfly.app.configure do
  processor :watermark do |content, *args|
    args    = args.first || {}
    opacity = args[:opacity] || 40
    watermark = File.new(File.dirname(__FILE__) + "relative/path/to/watermark.png").path
    content.process! :convert, "#{watermark } -compose dissolve -define compose:args=#{opacity}% -gravity southwest -geometry +20+20 -composite"
  end
end

@luopio Yes, the API has changed since the writing of this gist. Thanks for sharing your version.