Position: LLM Watermarking Should Align Stakeholders' Incentives for Practical Adoption

ArXi:2510.18333v2 Announce Type: replace-cross Despite progress in watermarking algorithms for large language models (LLMs), real-world deployment remains limited. We argue that this gap stems from misaligned incentives among LLM providers, platforms, and end users, which manifest as three key barriers: competitive risk, detection-tool governance, and attribution issues. We revisit three classes of watermarking through this lens. \emph{Model watermarking} naturally aligns with LLM provider interests, yet faces new challenges in open-source ecosystems.