Deformations and contractions of algebraic structures

We describe the basic notions of versal deformation theory of algebraic structures and compare it with the analytic theory. As a special case, we consider the notion of versal deformation used by Arnold. With the help of versal deformation we get a stratification of the moduli space into projective orbifolds. We compare this with Arnold's stratification in the case of similarity of matrices. The other notion we discuss is the opposite notion of contraction.