How does the color of henna fade? Henna contain lawsone pigment that attaches to the proteins of the skin,hair,etc.But after a few weeks the color fades? How does the color fade? Is the pigment volatile or it is degraded by the body?

It doesn't become volatile nor is it degraded. Neither is really possible because the dye (lawsone) forms very strong bonds with protein molecules and also penetrates the skin quite well source: [here].

Henna fades with time via exfoliation. In other words, it fades progressively as additional layers of skin die and fall ( _or_ "slough") off.