There are many cases where Versioning is necessary for a system.  You know the kind of thing, where a "proposal cost estimate" gets reviewed, edited, rejected, accepted, updated, reviewed etc.  Or a "Project Plan" is started, then revised, then ...

You will want to keep the source object (the "Proposal Cost Estimate" or "Project Plan") etc. as one object, just be able to save these changes as "versions" - and be able to switch to and fro between versions.

The example we have , a cost Estimate may be versioned, allowing the estimator to update the estimate, whilst maintaining the history / audit trail of the various versions.

As suggested, versioning is applied to the Object Type - it is a simple check box setting in Object Modeller.  When selected the standard Object Versioning is enabled for that object type - all instances.

The attached video both demonstrates how this is enabled with Modeller and what affect Versioning has on the individual objects.