Make the basil syrup. Combine the sugar, water, and basil in a small saucepan. Bring to just a boil, remove from heat and let cool for 5 minutes. Remove the basil leaves before using.
Purée the watermelon. In a blender, food processor, or with a hand blender, purée the watermelon until smooth. Strain through a fine-mesh strainer. You should have about 1 cup of watermelon juice after straining.
Make the limeade. In a pitcher or pan, whisk together the watermelon juice, basil syrup, lime juice, and water. Transfer to a soda or whipped cream dispenser. Screw the lid and nozzle on tight, and add a fresh CO2 charger to the container. If you don't have a dispenser, substitute soda water for regular water.
Serve. Garnish with fresh watermelon, basil, and lime, and enjoy! Add a splash of your favorite liquor to upgrade to an adult cocktail.