Onislayer Greatarrows deal less damage than Dragonslayer Greatarrows, however they make up for this with their improved range and travel speed.
Generally, Dragonslayer Greatarrows will outdamage Onislayer Greatarrows when both are fired from the same greatbow. However, the increased effective range of Onislayer Greatarrows allows them to retain their damage when firing at targets that are farther away. In situations where damage falloff and travel arc can result in decreased damage (as well as reduced accuracy) when using normal greatarrows, the Onislayer Greatarrow can still deal respectable damage to its target while still offering a fair chance at a headshot for critical damage. As well, the arrow's higher missile speed allows it to be used to good effect against moving targets, as the lessened travel time makes target tracking easier.
The other drawback to Onislayer Greatarrows, besides their reduced base damage and smaller quiver size (players may only carry 30 Onislayer Greatarrows, as opposed to 50 Dragonslayer Greatarrows), is that they are incapable of knocking down their targets, even on headshots. In situations where targets are positioned near cliff edges, an Onislayer Greatarrow may deal respectable damage, but is incapable of knocking the enemy off of ledges in order to deal potentially fatal fall damage.