Rapid and reversible performance loss in proton exchange membrane fuel cells (PEMFCs) has been observed due to membrane chemical degradation. Despite various experimental efforts, challenges persist in studying the membrane degradation dynamics and its connection to performance loss. While many membrane degradation models exist, they significantly underestimate the performance decay and fail to replicate its reversibility, limiting their predictive capacity. To address this gap, we present a physics-based membrane degradation model that effectively captures the decay and recovery of both open circuit voltage (OCV) and performance by incorporating the release and transport of sulfate and sulfonate, byproducts of membrane degradation, as well as their interactions with catalyst layers. Simulation results are compared with experimental data from the literature, successfully replicating sulfate adsorption, OCV/performance loss/recovery, and byproduct release rates. Further analyses reveals the role of membrane degradation in reversible performance loss, suggesting that the performance decay is primarily attributed to catalyst poisoning, while the reduced resistance is due to membrane thinning from the much faster mainchain degradation process. Our results also indicate that the H2/N2 recovery protocol is less effective than H2/air due to the fast condensation of supersaturated gases in channels and the absence of water generated by electrochemical reactions.