Preheat the oven to 350°F (175°C).

In a mixing bowl, combine watermelon puree, sugar, and softened butter.

Add eggs and vanilla extract, and mix well.

In another bowl, whisk together flour and baking powder.

Gradually add the dry ingredients to the wet ingredients, mixing until just combined.

Spoon the batter into a muffin tin lined with cupcake liners.

Bake for 18-20 minutes or until a toothpick comes out clean.

Let cool completely before frosting.

In a bowl, beat together cream cheese, powdered sugar, and vanilla extract until smooth.

Frost the cooled cupcakes with the cream cheese frosting.

Top with watermelon chunks for garnish.