The classic definition of brake fade is when no matter how hard you press the pedal very little happens in the braking department but quite a lot in the trouser department. The pedal feels fine but nothing much happens. This is caused by too much heat which releases gases from the pad material forming a barrier between pad and rotor. Slots and/or holes can help dissipate the gases reducing the risk of fade. Using a harder pad material can also help but this will result in a reduction in braking efficiency at normal road speeds as they need to be hot in order to work properly.
The spongy brake 'fade' isn't actually fade. The pad and rotor friction coefiicient hasn't changed but the pressure that the pedal is able to exert has been reduced by contaminates in the brake fluid, usually water. Brake fluid is hygroscopic, meaning it absorbs water. This can build up over time to a level that when heavy braking occurs the heat generated boils the water turning it into vapour which is compressable, hence the spongy feel to the pedal.
For road use, simply changing the fluid reguarly (realistically, every couple of years is fine) is all that is required to keep that hard pedal feel.
For track use, where temperatures can get very high, a higher boiling point fluid is advantageous. Be careful, however, if considering a silicone based fluid. Although not hygroscopic it can reduce the hardness of standard road car brake system seals resulting in an early failure.