to be more exact, ultracoin is a hybrid proof-of-work/proof-of-stake coin, whereby active nodes are involved in the mining of blocks if they hold utc.
this will give a strong incentive to a. hold coins and b. be an active node (e.g. have wallet open/running) on the network.

this means that, under certain circumstances, you may accrue 20% proof-of-stake interest per year on the coins you own.

a good source for more information is https://en.bitcoin.it/wiki/Proof_of_Stake