The phenomenon of electrowetting, i.e., the dependence of the macroscopic contact angle of a fluid on the electrostatic potential of the substrate, is analyzed in terms of the density functional theory of wetting. It is shown that electrowetting is not an electrocapillarity effect, i.e., it cannot be consistently understood in terms of the variation of the substrate-fluid interfacial tension with the electrostatic substrate potential, but it is related to the depth of the effective interface potential. The key feature, which has been overlooked so far and which occurs naturally in the density functional approach is the structural change of a fluid if it is brought into contact with another fluid. These structural changes occur in the present context as the formation of finite films of one fluid phase in between the substrate and the bulk of the other fluid phase. The non-vanishing Donnan potentials (Galvani potential differences) across such film-bulk fluid interfaces, which generically occur due to an unequal partitioning of ions as a result of differences of solubility contrasts, lead to correction terms in the electrowetting equation, which become relevant for sufficiently small substrate potentials. Whereas the present density functional approach confirms the commonly used electrocapillarity-based electrowetting equation as a good approximation for the cases of metallic electrodes or electrodes coated with a hydrophobic dielectric in contact with an electrolyte solution and an ion-free oil, a significantly reduced tendency for electrowetting is predicted for electrodes coated with a dielectric which is hydrophilic or which is in contact with two immiscible electrolyte solutions.

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