VLV (VaultLedger Verification): Vault-Backed Blockchain Protocol for Legacy Systems — A Decrypt-Free Pairwise Verification Protocol Bridging Legacy Finance and Blockchains

VaultLedger Verification (VLV) is a protocol for stable and efficient integration of legacy financial systems (off-chain) with a blockchain ledger (on-chain), while preserving confidentiality of balances and transaction amounts. VLV is designed to provide decrypt-free integrity and equality verification of encrypted ledger values by combining: (i) elliptic-curve partial homomorphic encryption (EC-PHE) in EC-ElGamal form, (ii) pairwise authentication semantics realized through sequentially refreshed nonces, and (iii) an internal commitment primitive named ESC Commitment (Encrypted Sequential Commitment). Only the minimal ciphertext component required for verification and homomorphic processing is recorded on-chain, while sensitive auxiliary components and keys are kept off-chain within a protected segment. We provide a formal protocol specification, component model, phase-based algorithms, and a security-level analysis grounded in standard hardness assumptions over elliptic-curve groups.